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UNITED STATESSECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549

FORM 10-KSB

(Mark One) [X]Annual Report Under Section 13 Or
15(d) Of The Securities Exchange Act Of 1934

For the fiscal year ended June 30, 2006

[   ] Transition Report Under Section 13 Or 15(d) Of
The Securities Exchange Act Of 1934

For the transition period from __________ to __________

COMMISSION FILE NUMBER:**000-33189**

CANYON COPPER CORP.(Name
of small business issuer in its charter)

|NEVADA                                                               | 88-0452792                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)
|                                                                     |                                  
|Suite 408 - 1199 West Pender Street                                  |                                  
|Vancouver, BC, Canada                                                | V6E 2R1                          
|(Address of principal executive offices)                             | (Zip Code)                       
|                                                                     |                                  
|(604) 331-9326                                                       |                                  
|Issuer's telephone number                                            |                                  

|Securities registered under Section 12(b) of the Exchange
      Act: | NONE.                                    
|-------------------------------------------------------------------- | -----------------------------------------
|                                                                     |                                          
|Securities registered under Section 12(g) of the Exchange
      Act: | Common Stock, $0.00001 Par Value perShare

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [   ]

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X]No [   ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [X]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [   ] No
[X]

State issuers revenues for its most recent fiscal year:
$NIL

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at
which the common equity was sold, or the average bid and asked price of such
common equity, as of a specified date within the past 60 days:
$17,993,325on the basis of the average of the bid and
ask price of the registrants common stock on June 30, 2006.

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date:
65,720,596, as at October 3, 2006.

Transitional Small Business Disclosure Format (Check one): Yes
[   ] No [X]

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TABLE OF CONTENTS

INDEX

|PART I     |                                                                                                                        | 3 
|---------- | ---------------------------------------------------------------------------------------------------------------------- | --
|           |                                                                                                                        |   
|ITEM 1.    | DESCRIPTION OF BUSINESS.                                                                                               | 3 
|ITEM 2.    | DESCRIPTION OF PROPERTY                                                                                                | 12
|ITEM 3.    | LEGAL PROCEEDINGS                                                                                                      | 20
|ITEM 4.    | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                                                                   | 20
|           |                                                                                                                        |   
|PART II    |                                                                                                                        | 21
|           |                                                                                                                        |   
|ITEM 5.    | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.                                                              | 21
|ITEM 6.    | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.                                                             | 22
|ITEM 7.    | FINANCIAL STATEMENTS.                                                                                                  | 34
|ITEM 8.    | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE                             | 35
|ITEM 8A.   | CONTROLS AND PROCEDURES.                                                                                               | 35
|ITEM 8B.   | OTHER INFORMATION.                                                                                                     | 35
|           |                                                                                                                        |   
|PART III   |                                                                                                                        | 36
|           |                                                                                                                        |   
|ITEM 9.    | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
      COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. | 36
|ITEM 10.   | EXECUTIVE COMPENSATION.                                                                                                | 41
|ITEM 11.   | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
      AND RELATED STOCKHOLDER MATTERS                   | 45
|ITEM 12.   | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                                                                        | 47
|ITEM 13.   | EXHIBITS                                                                                                               | 48
|ITEM 14.   | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                 | 51
|           |                                                                                                                        |   
|SIGNATURES | 52                                                                                                                    

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PART I

ITEM
1.                
DESCRIPTION OF BUSINESS.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Report on Form
10-KSB constitute forward-looking statements. These statements, identified by
words such as plan, anticipate, believe, estimate, should, expect
and similar expressions include our expectations and objectives regarding our
future financial position, operating results and business strategy. These
statements reflect the current views of management with respect to future events
and are subject to risks, uncertainties and other factors that may cause our
actual results, performance or achievements, or industry results, to be
materially different from those described in the forward-looking statements.
Such risks and uncertainties include those set forth under the caption
"Management's Discussion and Analysis or Plan of Operation" and elsewhere in
this Form 10-KSB. We advise you to carefully review the reports and documents we
file from time to time with the Securities and Exchange Commission (the SEC),
particularly our quarterly reports on Form 10-QSB and our current reports on
Form 8-K.

As used in this Annual Report, the terms we, us, our,
Canyon Copper, and the Company mean Canyon Copper Corp., unless otherwise
indicated. All dollar amounts in this Annual Report are expressed in U.S.
dollars unless otherwise indicated.

Overview

We were incorporated on January 21, 2000 under the laws of the
State of Nevada under the name Aberdene Mines Limited. We subsequently changed
our name to Canyon Copper Corp. on August 8, 2006. We are an exploration stage
company engaged in the acquisition, exploration and development of mineral
properties. We currently own the rights to acquire a 100% interest in three
major claims we refer to as the New York Canyon Project. At present, we do not
own any mineral claims directly.

The first two major claim blocks comprise a total of 1,003
mineral claims, representing approximately 20,560 acres located in Mineral
County, Nevada. We refer to the first block of claims as the "Copper Queen
Claims, and the second contiguous block of claims as the "Longshot Ridge
Claims. Further, pursuant to a lease agreement with a private company, we were
granted rights to explore a claim we refer to as the Jaycor Claims and, if it
proves to be feasible, develop 18 patented mineral claims to the full extent
permitted by applicable mining regulations, which claims cover a geographic area
of approximately 361 acres, located within the vicinity of the New York Canyon
Project area.

We have not earned any revenues to date and do not anticipate
earning revenues until such time as we enter into commercial production of our
mineral properties. We are presently in the exploration stage of our business
and we can provide no assurance that commercially viable mineral deposits exist
on our claims or that we will discover commercially exploitable levels of
mineral resources on our properties, or if such deposits are discovered, that we
will enter into further substantial exploration programs. Our primary
operational activities have been focused on analysis and exploratory drilling on
the New York Canyon Project over which we have an option to acquire or the right
to explore the mineral claims within the New York Canyon Project area. The
agreements pursuant to which we acquired our interests in the New York Canyon
Project provide that we must make a series of cash payments and issue certain
shares over certain time periods, expend certain minimum amounts on the
exploration of the properties or contribute our share of ongoing expenditures.
If we fail to make such payments or expenditures in a timely fashion, we may
lose our interest in those properties.

Recent Corporate Developments

Since the last fiscal year ended June 30, 2005, we experienced
the following significant corporate developments:

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|1. | On October 2, 2006, Mark A. Reynolds was appointed as a
      member of the Board of Directors of the Company. On October 6, 2006 Mr.
      Reynolds was subsequently appointed as the Companys Vice President of
      Finance. Mr. Reynolds has a Bachelor of Business Administration from Edith
      Cowan University of Western Australia and over twenty years of experience
      in mining and finance. Mr. Reynolds, previously a stock broker,
      concentrated on financing and development of numerous mining and oil &
      gas companies. Mark has developed and maintains strategic relationships
      with numerous contacts within the international institutional and
      brokerage communities. Mr. Reynolds currently receives consulting fees of
      $10,000 per month under a consulting agreement dated January 19, 2006. Mr.
      Reynolds will continue to receive the consulting fees as the Companys
      Vice President of Finance.                                                                                                                                                                                                                                                 
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | On September 12, 2006 we entered into a loan agreement
      with Aton Ventures Fund Ltd. (Aton) pursuant to which we received a loan
      of $250,000 from Aton. On September 11, 2006 we entered into a loan
      agreement with Asset Protection Fund Ltd. (APF) pursuant to which we
      received a loan of $250,000 from APF. Each of the loans is evidenced by
      convertible promissory notes. The Aton loan bears interest at a rate of 8%
      per annum and matures on December 12, 2006. The APF loan bears interest at
      a rate of 8% per annum and matures on December 11, 2006. Each of the loans
      is convertible at the option of the lender at any time prior to maturity
      into shares of common stock of Canyon at a price of $0.30 per share.
      Proceeds of the loans were used for working capital purposes to fund our
      continued operations.                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3. | On August 16, 2006, we received unsecured loans totalling
      an aggregate of $186,010 (CDN$209,000) from the following individuals:
      Walter Kondrosky, Kathy Huettl, Bob Gibb, Susan Hand, and Anthony Harvey,
      an officer and member of our board of directors. Proceeds of the loans are
      to be used for working capital purposes. The loans are evidenced by
      unsecured promissory notes (the Notes). Each of the Notes bears interest
      at a rate of 15% per annum and is due on October 30, 2006. We are also
      required to pay a 7.5% administration fee on the principal amount of each
      of the Notes. Outstanding amounts under the Notes may be prepaid, in whole
      or in part, at any time at our option without penalty.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4. | Effective August 8, 2006, our stockholders approved the
      change in our name from Aberdene Mines Limited to Canyon Copper Corp.
      and an increase in our authorized capital from 100,000,000 shares of
      common stock par value $0.00001 to 500,000,000 shares of common stock, par
      value $0.00001 per share. As a result of the name change, our
      Over-the-Counter Bulletin Board (the OTC Bulletin Board) symbol has
      changed to CYOO as of August 11, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|5. | On June 14, 2006, we announced results from the first
      four of 24 holes drilled on the Longshot Ridge zone of our New York Canyon
      Project property. See Description of Property, below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|6. | On May 30, 2006 Brent Jardine, Robert Weicker and Timothy
      Hipsher resigned from our board of directors. Effective May 30, 2006, we
      made the following board and officer appointments: (i) Anthony Harvey and
      Benjamin Ainsworth were appointed to our board of directors to fill the
      vacancies created following the resignations of Mr. Jardine, Mr. Weicker
      and Mr. Hipsher from the board; (ii) Mr. Harvey was appointed as our
      Chairman and Chief Executive Officer; (iii) Mr. Ainsworth was appointed as
      our Secretary; and (iv) Bryan Wilson, presently a member of our board of
      directors, was appointed as our President and Treasurer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|7. | In April, 2006 we signed an engagement letter with a
      Canadian underwriter to act as a placement agent on a best efforts basis
      in connection with a proposed syndicated private placement to non-US
      residents for gross proceeds of up to US$6,000,000 (the Canadian
      Offering), with an over-allotment option of up to 15% of the number of
      units offered at closing. The Canadian Offering is expected to consist of
      up to 10,000,000 units (each a Unit) at a price of US$0.60 per Unit,
      with each Unit consisting of one common share and one share purchase
      warrant exercisable for a period of up to 18 months at a price of $0.90
      following the closing of the Canadian Offering. Pursuant to the terms of
      the engagement letter the agent will receive a cash commission of 8% of
      the gross proceeds of the sale of the Units issued pursuant to the
      Canadian Offering and Unit purchase warrants equal to 10% of the Units
      issued pursuant to the Canadian Offering. The engagement letter is subject
      to each of the parties satisfactory completion of due diligence and the
      entry into definitive agreements between

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|    | the parties. To date no shares have been sold pursuant to
      the Canadian Offering and there is no assurance that the proposed Canadian
      Offering will be completed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|8.  | In April, 2006 we signed an engagement letter with a US
      underwriter to act as placement agent on a best efforts basis in
      connection with a proposed private placement of our securities to US
      residents for gross proceeds of up to US$6,000,000 (the US Offering).
      The US Offering is expected to consist of up to 10,000,000 units (each a
      Unit) at a price of US$0.60 per Unit, with each Unit consisting of one
      common share and one share purchase warrant exercisable for a period of up
      to 18 months at a price of $0.90 following the closing of the US Offering.
      Pursuant to the terms of the engagement letter, the US agent will receive
      a cash commission of 8% of the gross proceeds of the sale of the Units
      pursuant to the US Offering and Unit purchase warrants equal to 10% of the
      Units issued pursuant to the US Offering. The engagement letter for the US
      Offering is subject to each of the parties satisfactory completion of due
      diligence. To date no shares have been sold pursuant to the US Offering
      and there is no assurance that the proposed US Offering will be
      completed.                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|9.  | During the year ended June 30, 2006, the majority of our
      exploration activities concentrated on data compilation, program planning
      and logistics and mobilization mobilization of crews, contractors and
      survey equipment for of the New York Canyon Project. Historical data for
      the Longshot Ridge area was compiled into electronic format and formed the
      basis for geological modeling of the deposit. This information was used
      for planning of the drill program and development of a 3D model of the
      mineralized system. An additional 560 claims were located in January,
      bringing the total number of claims under option to 1,003 covering
      approximately 20,560 acres. Contracts for drilling, analyses,
      metallurgical testing and geophysics surveys were arranged and field
      personnel hired to undertake the planned work program. A 117 line
      kilometer ground magnetics survey was completed during March of 2006.
      Equipment and crew were mobilized to the project site at the end of March,
      2006, with drilling commencing April 3, 2006. Drilling, grid work,
      geophysical surveys and permitting were ongoing during April, 2006, and
      are expected to continue throughout our next fiscal year. See Plan of
      Operation, below.                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|10. | On April 5, 2006, our board of directors adopted our 2006
      Stock Incentive Plan (the "Plan"). Under the terms of the Plan, options to
      purchase up to 10,000,000 shares of our common stock that may be granted
      to our employees, officers, directors, and eligible consultants of Canyon
      Copper. The Plan provides that the option price be the fair market value
      of the stock at the date of grant as determined by the board of directors.
      Options granted become exercisable and expire as determined by our board
      of directors. The maximum aggregate number of shares of our common stock
      that may be optioned and sold under the Plan will be increased effective
      the first day of each of our fiscal quarters, beginning with the fiscal
      quarter commencing April 1, 2006, by an amount equal to the lesser of: (i)
      15% of the total increase in the number of shares of common Stock
      outstanding during the previous fiscal quarter; or (ii) a lesser number of
      shares of common stock as may be determined by our board of
    directors.                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|11. | On March 22, 2006, we entered into a mineral processing
      and research agreement (the Research Agreement) with Nevada Sunrise LLC
      (Nevada Sunrise), and Intor Resources Corporation pursuant to which we
      assumed the responsibility for managing the exploration program on the New
      York Canyon Property and engaged Nevada Sunrise for the purpose of
      developing a recovery process for copper. Pursuant to the terms of the
      Research Agreement, we retained Nevada Sunrise to develop an economic
      alkaline hydrometallurgical process for recovery of copper and other
      valuable minerals from the Longshot Ridge resource on the New York Canyon
      Project property, in consideration of which we agreed to: (i) pay Nevada
      Sunrise $100,000 on execution of the agreement, (ii) pay $50,000 by June
      1, 2006 (paid); (iii) pay $50,000 by July 1, 2006, and (iv) pay $50,000 by
      August 1, 2006. Under the terms of the agreement Nevada Sunrise must
      provide a proof of concept report regarding the results of its research
      by no later than January 31, 2007. If Nevada Sunrise reports the
      feasibility of the process in the report, we will be granted a
      non-exclusive license to employ the process in consideration of which we
      will grant Nevada Sunrise the option to purchase 1,000,000 shares of our
      common stock at a price of $1.00 per share.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|12. | On March 3, 2006, our board of directors appointed Mr.
      Bryan Wilson as a member of our board of directors. Mr. Wilson has been
      engaged in the fields of mining exploration and development for 18 years
      and financial services for 12 years. He has held positions as project
      geologist/manager for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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|    | Shell Canada; consultant and financial advisor for Scotia
      McLeod; mining analyst for C.M. Oliver; and corporate finance specialist
      for Dominick & Dominick and Thames Capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|13. | On March 2, 2006 we issued 500,000 shares of our common
      stock to Nevada Sunrise pursuant to the terms of our Property Option
      Agreement with Nevada Sunrise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|14. | On February 27, 2006, we received a geological report
      from our consulting geologists Geoffrey Goodall, and Mel Klohn. The report
      confirmed that all exploration to date demonstrated significant zones of
      copper mineralization on the New York Canyon Project property. The report
      recommends a two-phase exploration program to advance the New York Canyon
      Project property with a budget of approximately $3,650,000 for Phase I and
      $3,000,000 for Phase II.                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|15. | On February 22, 2006, our board of directors appointed
      Mr. John Carlesso as a member of our board of directors. Mr. Carlesso is a
      senior executive with over 15 years of international business and
      financial markets experience. He is currently the president of Apogee
      Minerals Ltd., a Canadian mining company developing advanced silver-zinc
      projects in South America. Mr. Carlesso has held the position of vice
      president, corporate development with Desert Sun Mining Corp, a gold
      mining company. Prior to this, Mr. Carlesso provided capital markets,
      corporate finance, and strategic marketing advice to growth-oriented
      companies across a broad range of sectors. Mr. Carlesso holds a Bachelor
      of Economics degree from the University of Western Ontario.                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|16. | On February 10, 2006, we raised gross proceeds of
      $1,790,000 in connection with a private placement pursuant to which we
      issued 4,475,000 units at a price of $0.40 per unit. Each unit consisted
      of one common share and one common stock purchase warrant. Each warrant
      entitles the holder to acquire one share of our common stock for $0.50 per
      share for two years following closing. See Unregistered Sales Of Equity
      Securities And Use Of Proceeds below.                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|17. | We entered into a consulting agreement with Geoffrey
      Goodall dated February 1, 2006 (the Goodall Consultant Agreement).
      Pursuant to the terms of the Goodall Consultant Agreement, Mr. Goodall
      will act as Chief Geologist/Exploration Manager and will oversee the
      evaluation and development of the New York Canyon Project. In
      consideration of his consultant services, we agreed to pay to Mr. Goodall
      $12,000 per month and granted to Mr. Goodall 1,000,000 incentive stock
      options. The options were issued on April 5, 2006 to Mr. Goodall pursuant
      to the 2006 Nonqualified Stock Option Plan at an exercise price of $0.50
      per share for a period of eighteen months. We also agreed to reimburse Mr.
      Goodall for all disbursements reasonably incurred by him for the purpose
      of providing the consulting services to us.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|18. | We entered into a consulting agreement with Linda Erdman
      dated February 1, 2006 (the Erdman Consultant Agreement). Pursuant to
      the terms of the Erdman Consultant Agreement, Ms. Erdman will act as
      Database Manager and oversee the data collection procedures on the New
      York Canyon Project. In consideration of her consultant services, we
      agreed to pay Ms. Erdman $5,000 per month and granted to Ms. Erdman
      100,000 incentive stock options. The options were issued on April 5, 2006
      pursuant to the 2006 Nonqualified Stock Option Plan at an exercise price
      of $0.50 per share for a period of eighteen months. We also agreed to
      reimburse Ms. Erdman for all disbursements reasonably incurred by her for
      the purpose of providing the consulting services to us.                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|19. | We entered into a consulting agreement with Robert Young
      dated February 1, 2006 pursuant to which Mr. Young agreed to present and
      disseminate certain information regarding Canyon Copper in consideration
      of which we agreed to pay Mr. Young a fee of $3,000 CDN per month. This
      consulting agreement was terminated effective June 1, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|20. | We entered into a consulting agreement with Mark Reynolds
      dated January 19, 2006 (the Reynolds Consultant Agreement). Pursuant to
      the terms of the Reynolds Consultant Agreement, Mr. Reynolds will provide
      us with the following services: (a) assist with hiring and co-ordination
      of geological consultants for Canyon Copper; (b) assist us in establishing
      materials handling procedures; (c) assist us in establishing audit and
      compensation committees and finding appropriate members for its
      committees; (d) assist the President in developing and implementing our
      business plans; (e) assist us in retaining and liaisoning with
      professional advisors in North America in connection with compliance with
      our reporting requirements under the Securities Exchange Act of 1934; and
      (f)                                

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|    | general administrative services as directed by us. In
      consideration of his consultant services, we agreed to pay Mr. Reynolds
      $10,000 US per month and granted to Mr. Reynolds 1,200,000 incentive stock
      options. The options were issued on April 5, 2006 pursuant to the 2006
      Nonqualified Stock Option Plan at an exercise price of $0.50 US per share
      for a period of five years. We will also reimburse Mr. Reynolds for all
      disbursements reasonably incurred by him for the purpose of providing the
      consulting services to us.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|21. | On January 6, 2006, our board of directors appointed Mr.
      Kurt Bordian as our Chief Financial Officer replacing Mr. Cameron Reynolds
      who will remain as our director. Mr. Bordian is a Certified General
      Accountant in Canada, and holds a Bachelor of Commerce degree (Hons) from
      the University of Manitoba. Mr. Bordian has worked primarily in the
      mineral exploration and oil and gas industries over the past 10 years, and
      has held the position of controller with three public companies exploring
      and operating in Ghana, Tunisia and Canada. We also entered into a
      consulting agreement with Mr. Kurt Bordian dated January 6, 2006, to serve
      as our Chief Financial Officer. The terms of the agreement include $7,490
      paid upon the execution of the agreement, $3,745 per month beginning on
      February 1, 2006, and the option to acquire up to 500,000 shares of common
      stock at an exercise price of $0.50 per share for two years. The agreement
      is for a term of one year. We will also reimburse Mr. Bordian for all
      disbursements reasonably incurred by him for the purpose of providing the
      consulting services to us.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|22. | On September 8, 2005, we completed a private placement of
      1,500,000 shares of our common stock at a price of $0.30 per share for
      gross proceeds of $450,000 pursuant to Regulation S of the Securities Act
      of 1933. We paid a finders fee of $33,750 in connection with the
      offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|23. | On August 29, 2005, we completed a private placement of
      5,000,000 shares of common stock at ap price of $0.25 per share for gross
      proceeds of $1,250,000 Regulation S of the Securities Act of 1933. The
      Company paid a finders fee of $93,818 and legal fees of
  $3,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

NEW YORK CANYON PROJECT

We hold interests in the following projects, as described
below:

|1. | our two major claim blocks composed of the Copper Queen
      Claims and the Longshot Ridge Claims; and
|-- | -------------------------------------------------------------------------------------------------------
|   |                                                                                                        
|2. | our Jaycor Claims.                                                                                     

Acquisition and Development of New York Canyon Project

Property Option Agreement with Nevada Sunrise, LLC

We acquired our interest in the New York Canyon Project
pursuant to a property option agreement (the Property Option Agreement) dated
March 18, 2004 with Nevada Sunrise, LLC, Robert Weicker and Sharon Weicker doing
business as Kleinebar Resources Ltd., Kurt Schendel, and Tami Schendel
(collectively, the Optionors).

Under the terms of the Property Option Agreement, we may
acquire a 100% interest in two major claim blocks comprising a total of 1,003
mineral claims, representing approximately 20,560 acres located in Mineral
County, Nevada. The first block of claims is referred to as the "Copper Queen
Claims, and the second block of claims as the "Longshot Ridge Claims. At
present, we do not own any mineral claims directly.

Pursuant to the Property Option Agreement, we may exercise our
option to acquire these claims in their aggregate by paying the Optionors the
following sums of cash, issuing the following common stock, and incurring
minimum exploration expenditures over three years. The components include:

| | (i)   | $30,000 on execution of the Property Option Agreement
      (paid);                                           
| | ----- | --------------------------------------------------------------------------------------------------------------
| | (ii)  | $60,000 on the first anniversary of the Property Option
      Agreement (paid);                               
| | (iii) | $120,000 or 400,000 common shares on the second
      anniversary of the Property Option Agreement (paid);
and

7

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| | (iv) | $250,000 or 600,000 common shares on the third
      anniversary of the Property Option Agreement.
| | ---- | --------------------------------------------------------------------------------------------------

We are also required to issue to the Optionors 2,000,000 shares
of our common stock over the three years. We issued 500,000 common shares of our
common stock on execution of the Property Option Agreement, and additional
500,000 common shares are to be issued on each of the first through third
anniversaries of the Property Option Agreement, of which the first anniversary
shares and the second anniversary shares have been issued to the Optionors. We
are also required to incur minimum aggregate exploration expenditures on the
claims of $2,000,000 in various stages as follows: $250,000 by December 31, 2004
(incurred); an additional $750,000 by December 31, 2005 (incurred); and an
additional $1,000,000 by December 31, 2006 (incurred).

The Optionors also retained a 2% net smelter returns royalty
(the Royalty) over any future production. We have the option to reduce the
Royalty to 1% by making a lump sum payment of $1,000,000 to the Optionors.

Concurrent with the completion of an initial exploratory
drilling program in the year of 2004, we successfully fulfilled our first year
financial and exploration obligations under the Property Option Agreement with
the Optionors of the New York Canyon Project property. During the year of 2005,
we paid $60,000 in cash and issued 500,000 common shares on the first
anniversary of the Property Option Agreement. In early 2006, we paid $120,000 in
cash and issued 500,000 common shares on the second anniversary of the Property
Option Agreement.

Lease Agreement with Jaycor Mining Inc.

On July 21, 2004, we entered into a lease agreement (the Lease
Agreement) with a private company, Jaycor Mining Inc. (Jaycor). Under the
terms of the Lease Agreement, we were granted rights to explore and, if it
proves to be feasible, develop 18 patented mineral claims held by Jaycor (the
Jaycor Claims) to the full extent permitted by applicable mining regulations.
These rights were granted as a lease for an initial term of 15 years, and are
renewable for a further 15 years. These claims cover a geographic area of
approximately 361 acres, located within the vicinity of the New York Canyon
Project area.

The claims under the lease are subject to an overriding Royalty
Deed granted to a third party by Jaycor. Upon commencement of production, we are
required to pay the third party a net smelter returns royalty of 1.75%, up to a
maximum of $2,000,000. In addition, we have also agreed to pay the private
company a net smelter return royalty of 0.5% until such time as the third party
has been paid $2,000,000, at which time the royalty payable to the private
company will then increase to 1.5% . The 1.5% rate payable to subject to a
maximum of $2,000,000, at which time the ongoing royalty will be reduced to 0.5%
for as long as the lease is in effect.

Since entering into the Lease Agreement with Jaycor, we have
completed two work programs on the Mayflower claim that forms part of the lease.
In 2004, a single drill core labelled 04-3, was completed to a depth of 433
feet. In 2005, 10 reverse circulation drill holes were completed for a total of
3,710 feet. Additional work on the patent claims includes geological mapping and
surface sampling. Proposed work on the Jaycor patented claims for 2006 includes
approximately 5,000 feet of RC drilling in 10 holes and 2,000 feet of core
drilling in 5 holes. See Description of Property, below.

Acquisition of Database on New York Canyon Project

On October 19, 2005 we entered into an agreement with Northern
Nevada Stone Co. whereby we acquired a large detailed database, which documents
the results of previous exploration activities on the New York Canyon Project in
exchange for $25,000 in cash and 25,000 shares of our common stock valued at
$9,750. The database includes the results of programs carried out by various
companies over a 25-year period starting in the 1970's and includes geological,
geochemical and geophysical data, drill logs with assay certificates,
petrographic studies, metallurgical test data, and a number of separate resource
estimate and feasibility studies.

The data, which is being evaluated, will be incorporated into
our current database and should significantly expedite our ongoing program to
validate potential copper resources on the New York Canyon Project.

8

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PRODUCTS, MARKETS, DISTRIBUTION, SUPPLIERS, AND CUSTOMERS

We do not currently produce any products, metals, or minerals
nor do we offer any products for sale. We are not party to any distribution
arrangements, and have no principal customers or suppliers. We do not anticipate
any changes in this status for at least the next 12 months, or until such time
as there is a commercially viable mineral or metal deposits located on our
mineral property.

COMPETITION

We are an exploration stage company. We compete with other
mineral resource exploration and development companies for financing and for the
acquisition of new mineral properties. Many of the mineral resource exploration
and development companies with whom we compete have greater financial and
technical resources than us. Accordingly, these competitors may be able to spend
greater amounts on acquisitions of mineral properties of merit, on exploration
of their mineral properties and on development of their mineral properties. In
addition, they may be able to afford greater geological expertise in the
targeting and exploration of mineral properties. This competition could result
in competitors having mineral properties of greater quality and interest to
prospective investors who may finance additional exploration and development.
This competition could adversely impact on our ability to finance further
exploration and to achieve the financing necessary for us to develop our mineral
properties.

MARKETS AND ECONOMICS

Although we compete with other junior exploration companies for
financing, properties of merit, and subcontractors, there is no competition for
the exploration or removal of mineralized material from the New York Canyon
Project claims for which we have an option to acquire or a right to explore.
Although there can be no assurance, large and well capitalized markets are
readily available for all metals and precious metals throughout the world. A
very sophisticated futures market for the pricing and delivery of future
production also exists. At present there are no limitations with respect to the
sale of metals or precious metals other than price. The price for metals is
affected by a number of global factors, including economic strength and
resultant demand for metals for production, fluctuating supplies, mining
activities and production by others in the industry, and new and or reduced uses
for subject metals.

DESCRIPTION OF MINING INDUSTRY

The mining industry is highly speculative and of a very high
risk nature. As such, mining activities involve a high degree of risk, which
even a combination of experience, knowledge and careful evaluation may not be
able to overcome. Few mining projects actually become operating mines.

The mining industry is subject to a number of factors,
including intense industry competition, high susceptibility to economic
conditions (such as price of metal, foreign currency exchange rates, and capital
and operating costs), and political conditions (which could affect such things
as import and export regulations, foreign ownership restrictions). Furthermore,
the mining activities are subject to all the hazards incidental to mineral
exploration, development and production, as well as risk of damage from
earthquakes, any of which could result in work stoppages, damage to or loss of
property and equipment and possible environmental damage. Hazards such as
unusual or unexpected geological formations and other conditions are also
involved in mineral exploration and development.

GOVERNMENTAL CONTROLS AND APPROVALS

Exploration and development activities are all subject to
stringent national, state and local regulations. Mining activities on our New
York Canyon Project properties must be carried out in accordance with a permit
issued by the Bureau of Land Management. All permits for exploration and testing
must be obtained through the local Bureau of Land Management (BLM) offices of
the Department of Interior in the State of Nevada. The granting of permits
requires detailed applications and filing of a bond to cover the reclamation of
areas of exploration. From time to time, an archaeological clearance may need to
be obtained prior to proceeding with any exploration programs.

9

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We plan to secure all necessary permits for any future
exploration. We must provide for all environmental concerns and ensure no
discharge of water into any body of water regulated by environmental law or
regulation. Indigenous and endangered species must only be subject to very
minimal or nil disturbances. Restoration of the disturbed land will be completed
according to applicable regulations and laws. All holes, pits and shafts will be
sealed upon abandonment of the property. It is difficult to estimate the cost of
compliance with the environmental laws since the full nature and extent of our
proposed activities cannot be determined until we start our operations.

Through the project operator, Nevada Sunrise, we have applied
for and received permits from the BLM to conduct drilling activities on BLM
administered lands within the New York Canyon Project property. The BLM
reference the property as case file NVN-79198. We are required to adhere to the
stipulations of the permit, primarily to plug all drill holes as they are
completed and to reclaim roads and drill sites when they are no longer
necessary. Reclamation work is ongoing but not complete as the project remains
active.

Our mining operation is regulated by Mine Safety Health
Administration (MSHA). MSHA inspectors periodically visit our project to
monitor health and safety for the workers, and to inspect equipment and
installations for code requirements. All of our workers have completed MSHA
safety training and must take refresher courses annually when working on our
project. A safety officer for the project is also on site.

Other regulatory requirements monitor the following:

| | (a) | Explosives and explosives handling.                                   
| | --- | ----------------------------------------------------------------------
| | (b) | Use and occupancy of site structures associated with
      mining.    
| | (c) | Hazardous materials and waste disposal.                               
| | (d) | State Historic site preservation.                                     
| | (e) | Archaeological and paleontological finds associated with
      mining.

We believe that we are in compliance with all laws and plans to
continue to comply with the laws in the future. We believe that compliance with
the laws will not adversely affect its business operations. There is however no
assurance that any change in government regulation in the future will not
adversely affect our business operations.

Federal Claim Maintenance Fees

In order to maintain our New York Canyon Project claims each
year we must pay a maintenance fee of $125 per claim to the Nevada State Office
of the Bureau of Land Management and on November 1 of each year we must file an
affidavit and Notice of Intent to Hold the claims in Clark County. We have paid
the required maintenance fees and filed the affidavits required in order to
extend the claims to August 31, 2007.

Environmental Liability

The New York Canyon Project property has a history of
exploration and development dating back to the early 1900s. As such there are a
series of prospect pits, exploration and mine shafts, road cuts and general
mining debris scattered throughout the property. None of this is considered to
be an environmental hazard; however, open mine workings are required to be
fenced for public safety. Operators during the bulk of the exploration of the
property during the 1960s through 1990s conducted their activities in
compliance with BLM requirements. This work has been either reclaimed or
accepted by the BLM. We are not responsible for existing disturbance from prior
activities on the New York Canyon Project property.

PATENT AND TRADEMAKRS

The Jaycor Claims we leased under the Lease Agreement in the
New York Canyon Project are patented claims. Please refer to the section
entitled "Metals and Mineral Exploration Business."

RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS

We have no plans to undertake any research and development
activities in the foreseeable future, and have not incurred research and
development expenditures to date.

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EMPLOYEES

Aside from our officers and directors, we have one full-time
employee at present. Our president, officers and board members are responsible
for all planning, developing and operational duties, and will continue to do so
throughout the early stages of our growth. We have consulting and management
agreements with Kurt Bordian, Anthony R. Harvey, Mark A. Reynolds, Geoffrey
Goodall, and Linda Erdman.

All of our exploration activities are currently carried out
through agreements with the owners or lessors of the claims under option or
lease, consultants and arm's length third parties. We use the services of
subcontractors for exploration work on its properties. Our only technical
employee is Mr. Geoffrey Goodall, who is our Senior Geologist and Vice President
of Exploration.

Consulting Agreements

We entered into a consulting agreement with Geoffrey Goodall
dated February 1, 2006 (the Goodall Consultant Agreement). Pursuant to the
terms of the Goodall Consultant Agreement, Mr. Goodall will act as Chief
Geologist/Exploration Manager and will oversee the evaluation and development of
the New York Canyon Project. In consideration of his consultant services, we
agreed to pay to Mr. Goodall $12,000 per month and granted to Mr. Goodall
1,000,000 incentive stock options. The options were issued on April 5, 2006 to
Mr. Goodall pursuant to the 2006 Nonqualified Stock Option Plan at an exercise
price of $0.50 per share for a period of eighteen months. We also agreed to
reimburse Mr. Goodall for all disbursements reasonably incurred by him for the
purpose of providing the consulting services to us.

We entered into a consulting agreement with Linda Erdman dated
February 1, 2006 (the Erdman Consultant Agreement). Pursuant to the terms of
the Erdman Consultant Agreement, Ms. Erdman will act as Database Manager and
oversee the data collection procedures on the New York Canyon Project. In
consideration of her consultant services, we agreed to pay Ms. Erdman $5,000 per
month and granted to Ms. Erdman 100,000 incentive stock options. The options
were issued on April 5, 2006 pursuant to the 2006 Nonqualified Stock Option Plan
at an exercise price of $0.50 per share for a period of eighteen months. We also
agreed to reimburse Ms. Erdman for all disbursements reasonably incurred by her
for the purpose of providing the consulting services to us.

We entered into a consulting agreement with Robert Young dated
February 1, 2006 pursuant to which Mr. Young agreed to present and disseminate
certain information regarding Canyon Copper in consideration of which we agreed
to pay Mr. Young a fee of $3,000 CDN per month. This consulting agreement was
terminated effective June 1, 2006.

We entered into a consulting agreement with Mark Reynolds dated
January 19, 2006 (the Reynolds Consultant Agreement). Pursuant to the terms of
the Reynolds Consultant Agreement, Mr. Reynolds will provide us with the
following services: (a) assist with hiring and co-ordination of geological
consultants for Canyon Copper; (b) assist us in establishing materials handling
procedures; (c) assist us in establishing audit and compensation committees and
finding appropriate members for its committees; (d) assist the President in
developing and implementing our business plans; (e) assist us in retaining
professional advisors in North America in connection with compliance with our
reporting requirements under the Securities Exchange Act of 1934; and (f)
general administrative services as directed by us. In consideration of his
consultant services, we agreed to pay Mr. Reynolds $10,000 US per month and
granted to Mr. Reynolds 1,200,000 incentive stock options. The options were
issued on April 5, 2006 pursuant to the 2006 Nonqualified Stock Option Plan at
an exercise price of $0.50 US per share for a period of five years. We will also
reimburse Mr. Reynolds for all disbursements reasonably incurred by him for the
purpose of providing the consulting services to us.

We entered into a consulting agreement with Kurt Bordian dated
January 6, 2006, to serve as our Chief Financial Officer. The terms of the
agreement include $7,490 paid upon the execution of the agreement, $3,745 per
month beginning on February 1, 2006, and the option to acquire up to 500,000
shares of common stock at an exercise price of $0.50 per share for two years.
The agreement is for a term of one year. We will also reimburse Mr. Bordian for
all disbursements reasonably incurred by him for the purpose of providing the
consulting services to us.

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SUBSIDIARIES

We have no subsidiaries.

ITEM
2.                
DESCRIPTION OF PROPERTY.

We currently do not own any real property. We have an interest
in the two groups of properties comprising (i) our two major claim blocks known
as the Copper Queen Claim and the Longshot Ridge claim, and (ii) our Jaycor
Claims.

We rent approximately 1,606 square feet of office space located
at Suite 408 - 1199 West Pender Street, Vancouver, BC, Canada at a cost of
approximately $5,800 per month. This rental is on a month-to-month basis with no
formal agreements.

NEW YORK CANYON PROJECT

We currently own the rights to acquire a 100% interest in three
major claims we refer to as the New York Canyon Project. At present, we do not
own any mineral claims directly.

The first two major claim blocks comprise a total of 1,003
mineral claims, representing approximately 20,560 acres located in Mineral
County, Nevada. We refer to the first block of claims as the "Copper Queen
Claims, and the second contiguous block of claims as the "Longshot Ridge
Claims. Further, pursuant to a lease agreement with a private company, we were
granted rights to explore a claim we refer to as the Jaycor Claims and, if it
proves to be feasible, develop 18 patented mineral claims to the full extent
permitted by applicable mining regulations, which claims cover a geographic area
of approximately 361 acres, located within the vicinity of the New York Canyon
Project area.

Figure 1  New York Canyon Property

12

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Location and Access, Climate, Local Resources, and
Physiography

The New York Canyon Project property is located 5 miles east of
Luning, Nevada and 30 miles southeast of Hawthorne. The Southern Pacific
Railroad maintains a railhead at Thorne, 8 miles north of Hawthorne. Access to
the claims is via Highway US95, Hawthorne to Luning, a distance of 25 miles.
From Luning, a 7 mile gravel county road provides access to the property.
Highway US95 provides road access to Reno, Nevada, 160 miles to the north and to
Las Vegas, 290 miles to the southeast.

Hawthorne has the necessary infrastructure to support
exploration and mining activity in the area. The claims cover a portion of the
western slope of the Gabbs Valley Range and extend westward into Soda Spring
Valley. Elevations range from 4,600 feet in the valley bottom to over 7,000 feet
at the crest of the Gabbs Valley Range. Relief is gentle to steep over the
property and is moderate in the vicinity of the known mineralized zones. The New
York Canyon Project property lies within the Sante Fe Mining District in
southern Mineral County, Nevada. Lands in the district are administered by the
Department of Interior, Bureau of Land Management (BLM). The claims lie
approximately 5 miles south-southeast of the Santa Fe Gold Mine, a former heap
leach gold mining operation.

The New York Canyon region is arid to semi-arid desert with
temperatures to 95°F in the summer and average temperatures of 25°F in the
winter. Precipitation varies between two and six inches per year. Physical work
could be conducted on the property year round. Vegetation of the area is typical
of central Nevada and consists of sagebrush and desert plants on the lower
slopes and valleys. Shadscale, white sage and greasewood occur with sagebrush on
the drier slopes and hills. Sparse cover of pinion pine and juniper trees occurs
at higher elevations. Depending on the extent of mineralization identified on
the property, the current claim base may be insufficient to support mining
operations, tailings and waste storage and processing plants. Additional surface
lands may be required for such operations. The existing infrastructure within
the area and the proximity to major centres such as Hawthorne and Reno are key
to supporting mining operations. Given the history of mining in Nevada, it is
anticipated that sufficient experienced manpower would exist locally to support
an operation at the New York Canyon property.

Figure 2  New York Canyon Property



13

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History

The Santa Fe Silver Mine established this mining district in
1879 with silver production from silver deposits in the district. The discovery
of significant copper deposits in 1893 superseded the silver mining operations
in the area. The New York Canyon Project property has a long history of
exploration, development and production dating back to 1875 when the copper
oxide deposits were first discovered. Between 1906 and 1929, an estimated 8.9
million pounds of copper were recovered from 110,000 tons of ore at an average
grade of 5.5% . Copper production exceeded 4,454 tons between 1906 and 1935.
There was also significant silver production during this period when copper
production reached its zenith.

During the mid-1960s through to the late-1970s, several
mining companies explored the New York Canyon property, primarily for the
porphyry copper sulphide potential completing 124 holes totalling 106,000 feet.
Modern exploration began in 1964 when Banner Mining Company (Banner) drilled
the Copper Queen and Champion mineral occurrences. In the 1970's, Amax Inc., and
later Conoco Inc. (Conoco) conducted significant exploration programs,
completing 24 holes, totaling 20,226 feet. A total of 15 holes were drilled to
test the Long Shot Ridge occurrence. The Conoco Oil Company, from 1977 to 1981,
provided a drill indicated reserve of 13.2 million tons grading 0.55% copper for
the Longshot Ridge area and 142 million tons grading 0.35% and 0.015% molybdenum
for the Copper Queen deposit. In 1979, Conoco conducted a preliminary testing
program for copper recovery in the drill core. Drill core from the Copper Queen
deposit yielded recoveries ranging from 65 to 75% copper over the six day leach
period with acid consumptions of 160 pounds per ton for porphyry copper
mineralized rock to 509 pounds of sulphuric acid (H2SO4)
per ton ofcarbonate rich host rock. Copper oxide material provided recoveries
ranging from 75.0% to 84.45% with acid consumption of 232 to 349 pounds
H2SO4per ton of ore.

Further exploration of the property was conducted between 1992
and 1997. Over this time, various joint venture partners primarily tested the
Longshot Ridge and Copper Queen deposit areas with an additional 46 drill holes
totalling 13,018 feet. In 1993, a reserve calculation of the Longshot Ridge
copper oxide deposit outlined proven and probable reserves of 17.7 million tons
grading 0.55% copper using a 0.23% copper cutoff. A subsequent engineering and
valuation report in 1997 confined a resource study to the upper Gabbs Formation
mineralized unit defining a resource of 6.9 million tons grading 0.494% copper.

Prior to the acquisition of our interest in the New York Canyon
property, 129 drill holes totalling 93,858 feet of drilling had been completed
on the property. Mountain States R & D International, Inc.s simulated vat
leach test on minus three-quarter inch copper mineralized material from Longshot
Ridge indicated a 39.41% copper recovery with total acid consumption of 174.7
pounds per ton of mineralized material. The 1993 report states that at an
average copper content of 0.57 percent, a short ton of Long Shot Ridge ore
contains 11.4 pounds of copper and if 40 percent of the copper is recovered and
167.92 pounds of acid are consumed, the cost of copper leached is 64.5 cents.

Acquisition of the New York Canyon Project Property

On March 18, 2004, we entered into the Property Option
Agreement with Nevada Sunrise. Under the Property Option Agreement, we were
granted an option to purchase 100% of interest in the New York Canyon Project
property located in Mineral County, Nevada.

Pursuant to the Property Option Agreement, we may exercise our
option to acquire these claims in their aggregate by paying the Optionors the
following sums of cash, issuing the following common stock, and incurring
minimum exploration expenditures over three years. The cash component includes:

| | (i)   | $30,000 on execution of the Property Option Agreement
      (paid);                                           
| | ----- | --------------------------------------------------------------------------------------------------------------
| | (ii)  | $60,000 on the first anniversary of the Property Option
      Agreement (paid);                               
| | (iii) | $120,000 or 400,000 common shares on the second
      anniversary of the Property Option Agreement (paid); and
| | (iv)  | $250,000 or 600,000 common shares on the third
      anniversary of the Property Option Agreement.            

We are also required to issue to the Optionors 2,000,000 shares
of our common stock over the three years. We issued 500,000 common shares of our
common stock on execution of the Property Option Agreement, and additional
500,000 common shares are to be issued on each of the first through third
anniversaries of the

14

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Property Option Agreement, of which the first anniversary
shares and the second anniversary shares have been issued to the Optionors. We
are also required to incur minimum aggregate exploration expenditures on the
claims of $2,000,000 in various stages as follows: $250,000 by December 31, 2004
(incurred); an additional $750,000 by December 31, 2005 (incurred); and an
additional $1,000,000 by December 31, 2006 (incurred).

The Optionors also retained a 2% net smelter returns royalty
(the Royalty) over any future production. We have the option to reduce the
Royalty to 1% by making a lump sum payment of $1,000,000 to the Optionors.

General Geology

The New York Canyon property lies within the central portion of
the Walker Lane Structural Belt, a zone of northwest striking parallel and
sub-parallel, right lateral strike slip faults in the western part of the Great
Basin region. The Walker Lane structural belt developed in an intra-arc setting
during the Cenozoic and extends for more than 400 miles through western Nevada
and into northern California. Tertiary volcanism and related hydrothermal
mineralization has been recognized throughout this structural break.

The New York Canyon area consists mostly of marine sedimentary
rocks of Triassic and Jurassic ages, which are intruded by granitic rocks of
Cretaceous age. Tertiary age nonmineralized volcanic flows locally cover these
older rocks. Quaternary age alluvium and colluvium are common in the valley
bottoms. Structural displacement of mineralized host rocks at New York Canyon is
generally associated with Walker Lane style structures that disrupt bedding and
provide conduits for mineralized source fluids. The oldest rocks underlying the
New York Canyon property are middle to late Triassic age Luning Formation,
predominately dolomite, dolomitic limestone and limestone with subordinate
shale, argillite and conglomerate. The Luning Formation is estimated to be over
10,000 feet thick with thin to medium bedded carbonate rocks intercalated with
siltstone in the lower 1,000 foot portion of the sequence, and massive to thick
bedded carbonate rocks in the upper half of the formation. The late Triassic age
Gabbs Formation conformably overlies the Luning Formation. Rocks of the Gabbs
Formation consist of a sequence of three members of thin bedded fossiliferous
limestone, argillaceous limestone and calcareous tuffaceous siltstone totalling
400 feet thick at the type locality in New York Canyon.

The Sunrise Formation of Jurassic age conformably overlies the
Gabbs Formation in a sequence of five members consisting of quartz latite
porphyry flows near the base, thin bedded limestones, siltstones, silty
limestone, tuffaceous siltstone, shale and claystone totalling about 600 to 800
feet in thickness at New York Canyon. The Sunrise Formation reaches as much as
1,200 feet thick in the Pilot Mountains to the southeast. The Sunrise Formation
is distinguished from the Gabbs Formation primarily by fossil type.

At New York Canyon, there is a conformable sequence from the
Luning Formation through the Gabbs Formation and into the Sunrise Formation.
Overlying the Sunrise Formation is the Jurassic age Dunlap Formation, a 3,000
foot thick sequence of basal conglomerate, limestone, clastic sediment, and
andesite and rhyolite flows.

Intruding this sequence of rocks are Jurassic to Cretaceous age
multiphase domes, plugs, dikes and sills consisting primarily of diorite and
granodiorite with areas of quartz monzonite, granite and other associated felsic
rock types. Tertiary age (mostly Oligocene and Miocene age) mafic to felsic
volcanics, volcanoclastics, flows, tuffs, tuffaceous sediments, and continental
sediments form capping units throughout the region in varying thickness to 8,000
feet.

Property Geology at New York Canyon

The upper New York Canyon area consists primarily of Luning
Formation limestone with the small area of Longshot Ridge overlain by Gabbs
Formation units and Sunrise Formation rocks. Felsic sills and dikes in turn
intrude these sedimentary units. In the Longshot Ridge area Luning Formations
(Lfm) consist of thick-bedded limestone and dolomite. These rocks are typical
gray to tan limestones and are exposed in the hillsides below the main ridge.

The Gabbs Formation at Longshot Ridge is moderately to highly
calc-silicate altered with remnant bedding textures evident locally. The rocks
were originally very thin bedded to laminated limestone and silty limestone
intercalated with siltstone and shale. Three members of the Gabbs Formation
consist of the lower unit of

15

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black, bioclastic limestone intercalated with siltstone; the
middle unit approximately 200 feet thick consisting predominately of
argillaceous limestone intercalated with calcareous and tuffaceous siltstone;
and the upper unit that extends from 0 to 200 feet consisting of argillaceous
limestone intercalated with siltstone.

The felsic intrusive rocks (Fi) on Longshot Ridge are primarily
sills with some local dikes. Rock types on the surface and encountered in
drilling consist of granodiorite porphyry. The average bedding at Longshot ridge
strikes N75°E with a 35° south dip. Although many of these faults are fairly
high angle, they commonly change dip direction due to the change of strike of
the structure. There are generally two sets of faults. A set trending NE and a
set trending NW with some local faults that strike N with a steep E dip.

Mineralization at New York Canyon

Mineralization at the New York Canyon property consists of
three primary occurrences of copper mineralization: Copper Queen on the west,
Champion in the center and Longshot Ridge on the east. These copper occurrences
lie along a west-northwest trend that likely reflects deeper basement
structures. Oxide copper mineralization is exposed on surface at the Longshot
Ridge (LSR) deposit with mixed oxide and sulphide mineralization at the
Champion deposit and predominantly sulphide mineralization at the Copper Queen
(CQ) deposit located 2.5 miles west of Longshot Ridge. Mineralization is
typically skarn associated with the intrusive rocks with porphyry affinities at
the Copper Queen.

Within the Luning Formation, the carbonates consist primarily
of dolomite and limestone. Alteration associated with these rocks consists of a
skarn suite of minerals (primarily serpentine, talc, garnet and magnetite, but
locally diopside). The serpentine and talc minerals form sinuous veins along the
structures within the dolomite and are very diagnostic of skarn formation in
dolomite. Solutions carrying the reagents for alteration followed high-angle
structures forming small skarn halos along structures due to the massive nature
of the Luning. Because of this, the copper mineralization was limited in area
(and tonnage), but fairly high grade. In addition, rocks of the Luning Formation
host small local zones of hematite and dolomite with jasperoid veins a few feet
thick. These have fine-grained silica, hematite, goethite, limonite and copper
oxides. Historically, all the higher-grade copper shipped from this district
during World War I was from the copper skarns in the Luning Formation, not from
copper skarns in the Gabbs Formation.

Within the Gabbs Formation, the sedimentary rocks consist
primarily of impure thinbedded sandy limestone and siltstone. Alteration
associated with these rocks consists of either a skarn suite of minerals
(garnet, diopside and magnetite) in the limestone, or a hornfels in the
siltstone. The copper mineralization is much more widespread, but lower grade
for the reasons stated above in the description of the Luning skarns. The
diopside rich skarns in the Gabbs Formation have a greater abundance of
fractures due to the brittle nature of diopside. As a result, the diopside
skarns are slightly higher grade than the garnet rich skarn because their more
abundant fractures are coated with copper minerals. Commonly, the Gabbs skarns
are only a few feet thick (5 to 15), but there are many of them. The lowest
unit in the Gabbs is the carbonaceous bioclastic limestone which hosts the
marble line (boundary of marblization and calc-silication) and rarely forms
skarns. The upper two Gabbs Formation units are the host for frequent skarns and
hornfels developed from mesothermal fluids that traveled along structures and
into permeable units forming calc-silicate altered and mineralized rock.
Granodiorite porphyry dikes and sills later intruded these same structures and
permeable beds. Most of the intrusive rocks proximal to the skarns are sills,
with some local dikes as well.

Within the Sunrise Formation, the two lowest sedimentary units
of impure thin-bedded sandy limestone and siltstone are altered and mineralized.
Alteration associated with these rocks consists of either a skarn suite of
minerals (garnet, diopside and magnetite) in the limestone, or a hornfels in the
siltstone. The copper mineralization is more widespread and lower grade as
described above. The diopside rich skarns in the Gabbs have a greater abundance
of fractures due to the brittle nature of diopside skarn. This creates a higher
concentration of copper due to the abundant fractures with copper minerals.
Commonly, Sunrise skarns are relatively thick, in the order of 50 feet. The
largest skarn bed is the Mayflower Mine which was mined on a fairly large scale.
Hornfels altered sedimentary rocks cap this thick skarn.

The alteration and mineralization at Longshot Ridge develop
copper-rich skarn within carbonaceous sediments, and stockwork copper-rich
veinlets in porphyritic intrusive sills and dykes. The three sedimentary units
with alteration and copper-rich mineralization include the Luning, Gabbs and
Sunrise Formations. In addition, some of the felsic porphyry intrusive dikes and
sills also have small amounts of copper mineralization as well as alteration
typical of this type rock (argillization, phyllic, and silicification). The
primary

16

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copper minerals consist of malachite, azurite, chrysocolla and
copper wad in order of abundance. A fairly common greenish clay alteration
mineral is suspected to be a zinc bearing clay. There is also evidence of
copper-rich limonite (goethite). A majority of the copper mineralization at
Longshot Ridge is within the two upper units of the Gabbs Formation. The
strongest and thickest mineralized zone is 1,300 feet long by 200 feet wide
oriented NW with a couple of 700 foot by 100 foot and 400 foot by 100 foot zones
along NW trending cross structures. Drilling defined these mineralized zones to
range from 100 feet to 300 feet thick.

Previous Exploration Of New York Canyon

We acquired an option to explore the New York Canyon property
in March, 2004 and have completed two exploration programs, including 16,482
feet in 40 holes. This work was primarily focused on outlining a resource at
Longshot Ridge. In total, approximately 169 drill holes totalling 110,340 feet
of drilling have been completed on the New York Canyon property.

Data Verification

During property visits in August and October, 2005, Qualified
Person Mel Klohn, P. Geo. was provided unrestricted access to all available
information pertaining to the project. As part of the verification process, Mr.
Klohn traversed parts of the Longshot Ridge Claims area and verified the
location of surface sample sites, drill hole locations and other geological
features.

Similarly, a review of the project and operations by the
author, Geoffrey Goodall, P.Geo., confirmed the presence of surface
mineralization at the Longshot Ridge and Champion areas, as well as a number of
prospects throughout the property.

Mineral Resource Estimate

We have not completed an independent mineral resource estimate
for the New York Canyon property. Mineral resource estimates were previously
conducted on the New York Canyon property by Conoco Inc. in 1979 and by CORE
Engineering Ltd. for Kookaburra in 1993.

Exploration During Year Ended June 30, 2006

During the year ended June 30, 2006, the majority of
exploration activities for Canyon concentrated on data compilation, program
planning and logistics and mobilization of the New York Canyon project. We
contracted Drift Exploration Drilling Inc. (Drift Exploration) of High River,
Alberta to conduct an initial 20,000 feet of reverse circulation (RC) drilling
using a track mounted rig. Drift Exploration conducted more than 10,000 feet of
drilling on the New York Canyon Project in 2005 and has knowledgeable and
skilled personnel to undertake the 2006 program. The rig has been was mobilized
to the New York Canyon Project property and drilling has commenced. Drill
progress was slow due to several equipment breakdowns with hydraulic hoses,
pumps and truck repairs. A total of 4,110 feet was completed in 13 holes, for an
average of 205 feet per operating day. Drilling was conducted on sites permitted
by Nevada Sunrise/Intor during the 2005 drill campaign. The majority of these
sites are peripheral to the main zone of mineralization at Longshot Ridge to
test the lateral extent of mineralization. Copper oxide was noted in most of the
drill holes, but less than described in previous holes in the core of the
mineralized area.

The current work program for New York Canyon project comprises
drilling an initial 56 holes at Longshot Ridge to outline the mineralized zone
followed by 14 drill holes at Copper Queen to test the mineralization at depth
there. Geophysical surveys, are intended to cover the main areas of interest to
develop further drill targets. The RC drill rig was mobilized to the property at
the end of March, 2006. A core rig was brought in May 8, 2006. The magnetic
survey was completed in March and the IP survey began on May 10, 2006 was
completed June 29. 2006. During June, 2006 a total of four RC holes for 1,660
feet (150 per day average) and four core holes totaling 1,402 feet (74 per day
average) were completed. The total amount of Reverse circulation drilling to
date is 8,803 feet in 25 holes. Core drilling amounts to 2,802 feet in eight
holes, for a total overall footage drilled to date of 11,605 feet in 33 holes.

On June 14, 2006 we announced results from the first four of 24
holes drilled on the Longshot Ridge zone of our New York Canyon property. As
shown in the table below, all holes intersected copper mineralization over the
length of the hole.

17

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Hole ID
    Section
    Azm.
    Dip
    From
    To
    Length
    TCu*ft
    ft
    ft
    %06-1R
    1200
    345
    80
    0
    395
    395
    0.269including
    
    
    
    0
    150
    150
    0.588and
    
    
    
    340
    380
    40
    0.18606-2R
    1800
    
    90
    20
    45
    25
    0.47406-3R
    1600
    
    90
    0
    305
    305
    0.118including
    
    
    
    95
    165
    70
    0.27206-4R
    1600
    
    60
    0
    40**
    40
    0.628


| | *  | TCu means the Total copper measured in the sample by a
      four acid digestion
| | -- | --------------------------------------------------------------------------------
| | ** | hole lost in mineralization at 40
feet.                                         

The drilling program has been designed to test the extent of
the mineralization at Longshot Ridge in order to provide a resource for this
zone later this year. All holes reported are drilled by reverse circulation
methods. Hole 06-1, was drilled as a step-out from a historic hole 92-20 which
intersected 130 feet at 0.305% Cu and was designed to test an intrusive contact
zone. The hole returned an average of 0.269% copper over the entire 395 foot
length. Hole 06-2 was drilled vertically to test the Gabbs Formation for
mineralization in this area and returned a 25 intercept averaging 0.474% copper.
Hole 06-3 was drilled to provide geology and assay data for this area. The hole
averaged 0.118% copper over the entire 305 foot length. Hole 06-4 was drilled to
intersect intrusive sills below historic hole MN-230 (0.316% Cu over 184.5
feet). The hole collapsed while still in mineralization and has since been
re-drilled as hole 06-8. The incomplete sampling of the section recovered from
above the collapse averaged 0.628% copper over 40 feet.

Copper analyses are being conducted by Inspectorate America
Corporation of Sparks, NV, an ISO 9002 accredited facility, certificate number
37295. A four acid total digestion for copper is used, followed by a
hydrochloric leach to determine oxide content. Silver, molybdenum and zinc are
analyzed by atomic absorption techniques.

In March 2006, we commenced the beginning stages of our
expanded 2006 program on the New York Canyon Project in accordance with the
planned recommended two phase exploration program we received in February, 2006.
Historic data for the Longshot Ridge area was compiled into electronic format
and formed the basis for geological modeling of the deposit. This information
was used for planning of the drill program and development of a 3D model of the
mineralized system. An additional 560 claims were located in January, bringing
the total number of claims under option to 1,003 covering approximately 20,560
acres. Contracts for drilling, analyses, metallurgical testing and geophysics
surveys were arranged and field personnel hired to undertake the planned work
program.

In addition, we contracted Leroy Kay Drilling of Yerington,
Nevada to provide core drilling services at the New York Canyon Project in 2006.
Mr. Kay has provided drilling services to us for the past two years and began
core drilling operations at New York Canyon in early May, 2006. Drill core will
allow thorough geological modelling of both the Longshot Ridge Claims copper
oxide skarn system and the Copper Queen Claims copper-molybdenum porphyry
mineralized area. Core samples will be used for metallurgical testing in order
to identify a beneficial copper extraction technique in the oxide mineralized
zones. Equipment and crew were mobilized to the project site at the end of
March, with drilling commencing on April 3, 2006. Drilling, grid work,
geophysical surveys and permitting were ongoing during April and continued to
June, 2006.

A 117 line kilometer magnetic survey also has been completed by
McGee Geophysics of Reno, Nevada in April of 2006. This data will provided
valuable information for designing an approximate 50 line kilometre induced
polarization (IP) geophysical survey targeted at defining zones of sulphide
mineralization peripheral to the Copper Queen Claims zone. Further, we
contracted Zonge Engineering Ltd. of Tucson, Arizona to conduct the IP survey
which was completed during our fourth quarter in fiscal 2006. Wright Geophysics
of

18

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Spring Valley, Nevada is the geophysical consultants to the New
York Canyon Project and will provide interpretation of the data.

LEASE AGREEMENT WITH JAYCOR MINING INC.

On July 21, 2004, we entered into a lease agreement (the Lease
Agreement) with a private company, Jaycor Mining Inc. (Jaycor). Under the
terms of the Lease Agreement, we were granted rights to explore and, if it
proves to be feasible, develop 18 patented mineral claims held by Jaycor (the
Jaycor Claims) to the full extent permitted by applicable mining regulations.
These rights were granted as a lease for an initial term of 15 years, and are
renewable for a further 15 years. These claims cover a geographic area of
approximately 361 acres, located within the vicinity of the New York Canyon
Project area.

These claims are located in Sections 32, 33 and 34 T8N; R35E
MDBM in Mineral County, Nevada and have been patented under the following:

Name of Claim
      Mineral Survey #
      US Patent #
      County Land ParcelMayflower
    38
    10541
    009-170-11Wall Street
    43
    21509
    009-170-09Turk
    44
    21510
    009-170-09Footwall
    3447
    264845
    009-170-03Nora Higgins
    3447
    264845
    009-170-02Willie Higgins
    3447
    264845
    009-170-02Annex No. 1
    3447
    264845
    009-170-03Annex No. 2
    3447
    264845
    009-170-03Annex No. 3
    3447
    264845
    009-170-03Annex No. 4
    3447
    264845
    009-170-03Iron Gate
    4444
    806518
    009-170-02Velvet
    4444
    806518
    009-170-02Saddle
    4444
    806518
    009-170-02Vacation
    4571
    982162
    009-170-12Goodenough
    4612
    989401
    009-170-02Copper Butte
    4612
    989401
    009-170-02Copper Bar
    4612
    989401
    009-170-02Hecla
    4612
    989401
    009-170-02


Under the terms of the Lease Agreement, we were granted rights
to explore and develop eighteen patented mineral claims to the full extent
permitted by applicable mining regulations. These rights were granted as a lease
for an initial term of 15 years, and are renewable for a further 15 years. The
claims cover a geographic area of approximately 361 acres, located within the
vicinity of our New York Canyon Project. As consideration for the right to
explore and develop the claims listed in the Lease Agreement, we are required to
pay Jaycor the following amounts prior to the commencement of any future
production activities: (i) $25,000 on execution of the Lease (amounts have been
paid); (ii) $1,000 monthly commencing on July 21, 2005, (amounts have been paid
as of the date of this annual report); $2,000 monthly commencing on July 21,
2006 (amounts have been paid as of the date of this annual report); and $3,000
monthly commencing on July 21, 2007, and continuing for as long as the Lease
Agreement is in effect.

All of these payments are considered to be minimum advance
royalty payments. Should production commence in the future, of which there can
be no assurance, these minimum payments would be credited against any actual
future royalty payments. If actual royalties payable from production exceed
$9,000 per quarter, these minimum payments would cease. If actual royalty
payments are less than $9,000 quarterly, we would be required to pay the
difference between the actual and the minimum payments. In addition to the
minimum payments, we issued 10,000 shares of our common stock to Jaycor in 2005
and have issued a further 15,000 common shares to Jaycor in 2006 pursuant to the
terms of the agreement.

The claims under the lease are subject to an overriding Royalty
Deed granted to a third party by Jaycor. Upon commencement of production, we are
required to pay the third party a net smelter returns royalty of

19

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1.75%, up to a maximum of $2,000,000. In addition, we have also
agreed to pay the private company a net smelter return royalty of 0.5% until
such time as the third party has been paid $2,000,000, at which time the royalty
payable to the private company will then increase to 1.5% . The 1.5% rate
payable to subject to a maximum of $2,000,000, at which time the ongoing royalty
will be reduced to 0.5% for as long as the lease is in effect.

Since entering into the Lease Agreement with Jaycor, we have
completed two work programs on the Mayflower claim that forms part of the lease.
In 2004, a single drill core labelled 04-3, was completed to a depth of 433
feet. In 2005, 10 reverse circulation drill holes were completed for a total of
3,710 feet. Additional work on the patent claims includes geological mapping and
surface sampling. Proposed work on the Jaycor patented claims for 2006 includes
approximately 5,000 feet of RC drilling in 10 holes and 2,000 feet of core
drilling in 5 holes.

ITEM
3.                
LEGAL PROCEEDINGS.

On May 25, 2005, the United States Securities and Exchange
Commission (the SEC) issued a formal order of private investigation to Canyon
Copper Corp. (formerly Aberdene Mines Limited). In connection with the
investigation order, we received subpoenas from the SEC requesting the
production of certain of our documents from several of our former employees,
relating to, among other things, our transactions with Langley Park, PLC and the
principals of Langley Park, PLC certain of our news releases and certain
materials sent to our stockholders. We have since received additional document
production orders from the SEC. We have complied with all document requests and
are voluntarily complying with the investigation. We have also responded to any
informal requests for information from the SEC.

On December 20, 2005, the British Columbia Securities
Commission (the BCSC) issued a formal investigation order to Canyon Copper and
certain of our former officers pursuant to the Securities Act of British
Columbia in connection with certain news releases and materials sent to our
stockholders in 2004. We are cooperating fully with the BCSC inquiry and have
submitted all requested documents in connection with the investigation to date.

ITEM
4.                
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

We held a special meeting of our stockholders on August 3, 2006
for the purpose of adopting the following proposals:

|1. | To approve an amendment to our Articles of Incorporation
      to increase the number of authorized shares of common stock, par value
      $0.00001, from 100,000,000 shares to 500,000,000 shares of common
      stock;                       
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | To approve an amendment to our Articles of Incorporation
      by changing our name from Aberdene Mines Limited to Canyon Copper
      Corp.;                                                                                                
|3. | To approve an amendment to our Articles of Incorporation
      by deleting Article 2 of our current Articles of Incorporation, referring
      to our principal office and the name and address of our resident agent, in
      its entirety; and
|4. | To approve our 2006 Stock Incentive
  Plan.                                                                                                                                                                                                      

At the meeting, the above proposals were approved by a majority
of our stockholders. The results of the vote taken on the proposal were as
follows:

Proposals
      For
      Against
      Withheld / Abstained1. Increase in authorized shares of Common
      Stock
    34,945,676
    116,235
    4502. Change the name to Canyon Copper Corp.
    35,043,686
    16,900
    1,7753. Deletion of Article 2 of Articles of
      Incorporation
    35,009,786
    23,200
    29,3754. Approve 2006 Stock Incentive Plan
    34,965,386
    94,275
    2,700


20

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PART II

ITEM
5.                
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Our shares are currently trading on the Over-The-Counter
Bulletin Board (the OTC Bulletin Board) under the symbol CYOO. The high and
the low bid prices for our shares for the last two fiscal years of actual
trading, as quoted in the OTC Bulletin Board, as applicable, were:

QUARTER
      HIGH ($)
      LOW ($)1stQuarter 2005
    4.50
    0.482ndQuarter 2005
    0.63
    0.243rdQuarter 2005
    0.40
    0.1654thQuarter 2005
    0.45
    0.1851stQuarter 2006
    0.53
    0.1852ndQuarter 2006
    0.42
    0.293rdQuarter 2006
    0.79
    0.4454thQuarter 2006
    0.75
    0.38


The trades reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not represent actual transactions.

Holders of Our Common Stock

As of June 30, 2006, we had 63 registered stockholders holding
65,555,596 of our issued and outstanding common stock.

Dividends

There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect to
the distribution of the dividend:

| | 1. | We would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                          
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                             
| | 2. | Our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed to satisfy the rights of
      stockholders who have preferential rights superior to those receiving the
      distribution.

We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

We have completed the following unregistered sales of our
securities not reported in our periodic reports during fiscal 2006:

|1. | On September 12, 2006 we entered into a loan agreement
        with Aton Ventures Fund Ltd. (Aton) pursuant to which we received
        a loan of $250,000 from Aton. On September 11, 2006 we entered into a
        loan agreement with Asset Protection Fund Ltd. (APF) pursuant
        to which we received a loan of $250,000 from APF. Each of the loans is
        evidenced by convertible promissory notes. The Aton loan bears interest
        at a rate of 8% per annum and matures on December 12, 2006. The APF loan
        bears interest at a rate of 8% per annum and matures on December 11, 2006.
        Each of the loans is convertible at the option of the lender at any time
        prior to maturity into shares of common stock of Canyon at a price of
        $0.30 per share. Proceeds of the loans were used for working capital purposes
        to fund our continued operations.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21

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|2. | In February, 2006, we completed a private placement
        (the Private Placement) offering of 4,475,000 shares of our
        common stock at a price of $0.40 per share (the Offering).
        Each unit included one common share and one share purchase warrant, entitling
        the holder to purchase an additional share over a two-year period at a
        price of $0.50 per share. We received an amount of $1,703,900 net of 7.5%
        finders fee of $86,100. The Offering was made pursuant to the provisions
        of Regulation S promulgated under the Securities Act of 1933 to persons
        who are not U.S. persons as defined in Regulation S. Each
        purchaser represented to us that they were a non-US person as defined
        in Regulation S. We did not engage in a distribution of this offering
        in the United States. Each purchaser represented their intention to acquire
        the securities for investment only and not with a view toward distribution.
        Appropriate legends were affixed to the stock certificate issued to each
        purchaser in accordance with Regulation S.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM
6.                
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Plan Of Operation

During the year ended June 30, 2006, the majority of
exploration activities for Canyon Copper concentrated on data compilation,
program planning and logistics and mobilization of the New York Canyon project.
We contracted Drift Exploration Drilling Inc. (Drift Exploration) of High
River, Alberta to conduct an initial 20,000 feet of reverse circulation (RC)
drilling using a track mounted rig. Drift Exploration conducted more than 10,000
feet of drilling on the New York Canyon Project in 2005 and has knowledgeable
and skilled personnel to undertake the 2006 program. The rig has been was
mobilized to the New York Canyon Project property and drilling has commenced.
Drill progress was slow due to several equipment breakdowns with hydraulic
hoses, pumps and truck repairs. A total of 4,110 feet was completed in 13 holes,
for an average of 205 feet per operating day. Drilling was conducted on sites
permitted by Nevada Sunrise/Intor during the 2005 drill campaign. The majority
of these sites are peripheral to the main zone of mineralization at Longshot
Ridge to test the lateral extent of mineralization. Copper oxide was noted in
most of the drill holes, but less than described in previous holes in the core
of the mineralized area.

In March 2006, we commenced the beginning stages of our
expanded 2006 program on the New York Canyon Project in accordance with the
planned recommended two phase exploration program we received in February, 2006.
Historic data for the Longshot Ridge area was compiled into electronic format
and formed the basis for geological modeling of the deposit. This information
was used for planning of the drill program and development of a 3D model of the
mineralized system. An additional 560 claims were located in January, bringing
the total number of claims under option to 1,003 covering approximately 20,560
acres. Contracts for drilling, analyses, metallurgical testing and geophysics
surveys were arranged and field personnel hired to undertake the planned work
program.

The current work program for New York Canyon project comprises
drilling an initial 56 holes at Longshot Ridge to outline the mineralized zone
followed by 14 drill holes at Copper Queen to test the mineralization at depth
there. Geophysical surveys, are intended to cover the main areas of interest to
develop further drill targets. The RC drill rig was mobilized to the property at
the end of March, 2006. A core rig was brought in May 8, 2006. The magnetic
survey was completed in March and the IP survey began on May 10, 2006 was
completed June 29. 2006. During June, 2006 a total of four RC holes for 1,660
feet (150 per day average) and four core holes totaling 1,402 feet (74 per day
average) were completed. The total amount of Reverse circulation drilling to
date is 8,803 feet in 25 holes. Core drilling amounts to 2,802 feet in eight
holes, for a total overall footage drilled to date of 11,605 feet in 33 holes.

In addition, we contracted Leroy Kay Drilling of Yerington,
Nevada to provide core drilling services at the New York Canyon Project in 2006.
Mr. Kay has provided drilling services to us for the past two years and began
core drilling operations at New York Canyon in early May, 2006. Drill core will
allow thorough geological modelling of both the Longshot Ridge Claims copper
oxide skarn system and the Copper Queen Claims copper-molybdenum porphyry
mineralized area. Core samples will be used for metallurgical testing in order
to identify a beneficial copper extraction technique in the oxide mineralized
zones. Equipment and crew were mobilized to the project site at the end of
March, with drilling commencing April 3, 2006. Drilling, grid work, geophysical
surveys and permitting were ongoing during April and continued to June, 2006.

22

---

A 117 line kilometer magnetic survey also has been completed by
McGee Geophysics of Reno, Nevada in April of 2006. This data will provided
valuable information for designing an approximate 50 line kilometre induced
polarization (IP) geophysical survey targeted at defining zones of sulphide
mineralization peripheral to the Copper Queen Claims zone. Further, we
contracted Zonge Engineering Ltd. of Tucson, Arizona to conduct the IP survey
which was completed during our fourth quarter in fiscal 2006. Wright Geophysics
of Spring Valley, Nevada is the geophysical consultants to the New York Canyon
Project and will provide interpretation of the data.

Geologists Recommendations

On February 27, 2006, we received a geological report from our
consulting geologists Geoffrey Goodall, P.Geo. and Mel Klohn, P.Geo. The report
recommended a two-phase exploration program on the New York Canyon Project
property, as follows:

Phase
      Exploration Program
      Status
      CostPhase I
    Further drilling at Longshot
      Ridge, Champion and Copper Queen mineralized zones to delimite the extent
      of the copper mineralization; extensive metallurgical testwork to identify
      a beneficial metallurgical procedure for copper oxide extraction; and
      initiate environmental base line studies for permitting advanced
      exploration.
    Commenced during January, 2006.
      Initial activities to be completed by October, 2006, but some work such as
      environmental studies and data compilation will be ongoing
    $3,650,000Phase II
    Infill and condemnation drilling
      in conjunction with a scoping study leading to a pre-feasibility study.
    Subject to favorable results of
      Phase I.
    $3,000,000TOTAL
    $6,650,000


Details of the Phase One exploration program include systematic
drilling at Longshot Ridge to determine boundaries to the oxide mineralization
and further definition of the underlying sulphide mineralization; step-out
drilling from the current area at Longshot Ridge in an effort to expand the zone
of mineralization, drilling of representative mineralized material for
metallurgical testwork for determination of the optimal copper beneficiation
process; IP (induced polarization) or CSAMT (controlled source audio magneto
telluric) geophysical surveys over the Copper Queen deposit area in an effort to
outline the zone of sulphide mineralization hosted in this deposit; drill
testing geophysical targets generated from the survey and other geological
targets in the Copper Queen and Champion areas; and further geological mapping
and rock geochemical sampling of the property. A budget of $3,650,000 is
recommended to support the Phase One exploration program.

Contingent upon favourable results from the Phase One program,
further exploration including definition drilling, permitting and scoping
studies would be warranted to advance the New York Canyon project to a
pre-feasibility stage. It is not possible to determine the full extent of a
Phase Two work program at this time, however given the amount of testwork, data
acquisition and compilation and permitting required to complete a scoping study,
it is estimated that a further $3 million may be necessary to advance the New
York Canyon property to a pre-feasibility level.

Exploration Activities on the Jaycor Claims During 2006

Since entering into a lease agreement with Jaycor Mining, Inc.
Canyon Copper has completed two work programs on the Mayflower claim that forms
part of the lease. In 2004, a single drill core labelled 04-3, was completed to
a depth of 433 feet. In 2005, 10 reverse circulation drill holes were completed
for a total of 3,710 feet. Additional work on the patent claims includes
geological mapping and surface sampling. Proposed work on the Jaycor patented
claims for 2006 includes approximately 5,000 feet of Reverse circulation
drilling in 10 holes and 2,000 feet of core drilling in 5 holes.

23

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Cash Requirements over the next Twelve Months

ITEM AND ACTIVITY
      Budget To June 30, 2007
      12 Month Total BudgetLAND STATUS2006 - 2007 claim maintenance fees
    $125,000
    $375,000Month Payments - Patents
    30,000
    45,000PERMITTINGRoad and drill site work
    45,000
    50,000Archeological and biological surveys
    20,000
    20,000Water quality monitoring
    10,000
    20,000Drill Permitting & Bonding, POO in fall
    35,000
    115,000Reclamation
    -
    20,000DRILL PROGRAM (includes
      assays & supervision)Compile data for engineering evaluation
    25,000
    75,000Drilling RC
    600,000
    1,200,000Drilling Core
    400,000
    700,000METALLURGICAL PROGRAMInvestigation into acid costs, sites,
      transport, etcPreliminary metallurgical work
    105,000
    155,000Preliminary alternative leach studies
    200,000
    300,000ENGINEERING & REPORTINGEngineering 43-101 Report
    15,000
    20,000Modeling, Scoping study
    -
    65,000GEOPHYSICAL SURVEYSInduced polarization
    70,000
    70,000Airborne radiometric survey
    40,000
    65,000GEOLOGICAL MAPPING AND INVESTIGATIONSMapping and sampling
    30,000
    60,000Contingency 10%
    175,000
    335,500Management fee 10%
    192,500
    369,050TOTAL
    $2,117,500
    $4,059,550


As at June 30, 2006, we had cash in the amount of $139,750. As
such, we currently do not have sufficient cash resources to meet budgeted
expenditures of approximately $4,059,550 and our ongoing general, administrative
and operating expenses which are estimated to be $480,000 during the next twelve
months. Our existing cash balances are not sufficient to fund our exploration
program and carry out our normal operations into the next fiscal year, and we
will require additional financing. We anticipate that, to the extent that we
require additional funds to support our operations or the expansion of our
business, we may sell additional equity or issue debt. Any sale of additional
equity securities will result in dilution to our stockholders. There can be no
assurance that additional financing, if required, will be available to us or on
acceptable terms.

We have not had revenues since inception. We are currently in
the process of identifying sources of additional financing. However, there is no
assurance we will be successful in raising the necessary funding or on terms
that are acceptable to us. Since inception, we have been dependent on investment
capital and debt financing from third parties as our primary source of
liquidity. We anticipate continuing to rely on equity sales of shares of our
common stock and loans in order to continue to fund our business operations.
Issuances of additional shares will result in further dilution of our existing
shareholders. See Future Financings, below.

24

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RESULTS OF OPERATIONS

|Summary of Year End Results |              |                          |                    
|--------------------------- | ------------ | ------------------------ | -------------------
|                            |              | Year
      Ended June 30 |                    
|                            |              |                          |                    
|                            | 2006         | 2005                     | Percentage         
|                            |              |                          | Increase / Decrease
|Revenue                     | $-           | $-                       | n/a                
|Expenses                    | (7,692,137)  | (4,025,401)              | 91%                
|Net Income (Loss)           | $(7,692,137) | $(4,025,401)             | 91%                

Revenue

We have not earned any revenues to date and do not anticipate
earning revenues until such time as we enter into commercial production of our
mineral properties. There can be no assurance that we will be successful in
discovering commercial quantities or that we can commercially produce metals or
minerals. We are presently an exploration stage company engaged in the search
for mineral reserves. We can provide no assurances that we will be able to
discover any commercially exploitable levels of mineral resources on our
property, or, even if such resources are discovered, that we will be able to
enter into commercial production of our mineral property.

Expenses

The major components of our expenses for the year are outlined
in the table below:

|                                                      |            | Year Ended June 30 |           
|----------------------------------------------------- | ---------- | ------------------ | ----------
|                                                      |            |                    | Percentage
|                                                      | 2006       | 2005               | Increase /
|                                                      |            |                    | Decrease  
|Operating expenses:                                   |            |                    |           
|Depreciation                                          | $3,532     | $1,002             | 252%      
|Foreign exchange (gain) loss                          | 12,900     | (39,712)           | (132%)    
|General and administrative                            | 4,301,001  | 1,064,799          | 304%      
|Impairment of mineral property costs                  | 405,000    | 1,876,500          | (78%)     
|Mineral exploration costs                             | 2,509,786  | 592,582            | 324%      
|Sub-total                                             | $7,232,219 | $3,495,171         | 107%      
|Other expenses:                                       |            |                    |           
|Interest on convertible debentures                    | $27,571    | $193,297           | (86%)     
|Impairment loss on investment
      securities        | 354,979    | -                  | n/a       
|Loss on sale of investment securities                 | 88,332     | 323,098            | (73%)     
|(Gain) loss on settlement of
      related party debt | (10,964)   | 13,835             | (179%)    
|Sub-total                                             | $459,918   | $530,230           | (13%)     
|Total Expenses                                        | $7,692,137 | $4,025,401         | 91%       

We incurred operating expenses in the amount of $7,232,219 for
the fiscal year ended June 30, 2006 as compared to $3,495,171 for the fiscal
year ended June 30, 2005. The increase in operating expenditures for 2006 as
compared with 2005 is primarily attributable to increased costs associated with
general and administrative expenditures, increased mineral property expenses,
and an impairment of mineral property

25

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costs. We anticipate that the expenses will continue to
increase due to our ongoing planned exploration activities, specifically our
2006/07 exploratory drilling program in the New York Canyon Project.

During the year ended June 30, 2006, we sold 250,000 Langley
Park shares, and at June 30, 2006 had a balance of 1,027,974 Langley Park shares
worth $224,053. In addition, during the year ended June 30, 2006, we recognized
interest on convertible debentures in the amount of $27,571, compared to $13,114
during the comparable period in 2005. As a result of the foregoing, net loss
increased to $7,692,137 for the year ended June 30, 2006 compared to $4,025,401
for the comparable period in 2005, which equated to a $0.13 loss per common
share versus $0.06 respectively. We anticipate that we will continue to incur
significant losses for the next several years due to our planned exploration
activities.

LIQUIDITY AND FINANCIAL CONDITION

|Working Capital                         |                     |                        |                    
|--------------------------------------- | ------------------- | ---------------------- | -------------------
|                                        |                     |                        | Percentage         
|                                        | At
      June, 2006 | At
      June 30, 2005 | Increase / Decrease
|Current Assets                          | $393,165            | $352,975               | 11%                
|Current Liabilities                     | 892,808             | 173,966                | 413%               
|Working Capital Surplus
      (Deficit) | $(499,643)          | $179,009               | (379%)             

|Cash Flows                                              |               |              
|------------------------------------------------------- | ------------- | -------------
|                                                        | Year Ended    | Year Ended   
|                                                        | June 30, 2006 | June 30, 2005
|Cash Flows used in Operating Activities                 | $(3,146,899)  | $(1,069,025) 
|Cash Flows (used in) provided from Investing Activities | (81,999)      | 365,916      
|Cash Flows from Financing Activities                    | 3,319,832     | 484,999      
|Net Increase (decrease) in Cash During Period           | $90,934       | $(218,110)   

The decrease in our working capital of $678,652 for the year
  ending June 30, 2006 was primarily a result of further exploration expenditures.
  We used $3,146,899 of cash for our operations and $10,122 for the purchase of
  equipment during the year ended June 30, 2006. For the year ended, $2,500,036
  of the cash used for operations was utilized for our fiscal 2006 exploratory
  drilling programs. As a result of all of the above noted exploration expenditures,
  our cash balances increased by a net amount of $90,934 during the year ended
  June 30, 2006.

At June 30, 2006, there were $284,999 of unsecured convertible
debentures outstanding. The debentures are convertible at the option of the
holder during a two year period from the date of issuance into our units, which
consist of one common share and one share purchase warrant. The holder must
convert all of the principal and accrued interest on the debentures. The
interest rate is the Bank of America prime rate plus 2.5% per annum. We are
required to pay accrued interest annually on January 31st. We also held $224,053
of marketable securities (the balance of Langley Park shares described herein)
as at June 30, 2006 (June 30, 2005 - $294,077).

During the year ended June 30, 2006, we raised proceeds of
$1,700,900 (net of the payment of a 7.5% finders fee and legal fees) with a
private placement to which we issued 4,475,000 units at a price of $0.40 per
unit. Each unit consists of one common share and one common stock purchase
warrant. Each warrant entitles the holder to acquire one share of our common
stock for $0.50 per share for two years.

In August, 2005 and September, 2005, we completed two private
placements of 6,500,000 common shares. We raised $1,566,432 (net of the payment
of a 7.5% cash finder's fee and legal fees) through the August, 2005 and
September, 2005 private placements. We do not have sufficient cash resources to
complete our current exploration program and fund our operations for the next
twelve months. As such, we will need additional financing to complete our
current exploration program. There can be no assurance that the

26

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required financing can be obtained. If we are unable to obtain
additional funds, we will not be able to complete our exploration program and
our option agreements will be terminated.

Future Financings

Our plan of operation calls for significant expenses in
connection with the exploration of the New York Canyon Project and requires us
to obtain additional financing. We recorded a net operating loss of $7,692,137
for the year ended June 30, 2006 and have an accumulated deficit of $13,682,690
since inception. As at the date of this Annual Report we had cash of $291,149
and, for the next twelve months, management anticipates that the minimum cash
requirements to fund our proposed exploration program and our continued
operations will be $4,059,550. Accordingly we do not have sufficient funds to
meet our planned expenditures over the next twelve months and will need to seek
additional financing to meet our planned expenditures.

Obtaining additional financing would be subject to a number of
factors, including the market prices for the mineral property and gold. These
factors may make the timing, amount, terms or conditions of additional financing
unavailable to us. Since our inception, we have used our common stock to raise
money for our operations and for our property acquisitions. We have not attained
profitable operations and are dependent upon obtaining financing to pursue our
plan of operation. For these reasons, our independent auditors believe there
exists a substantial doubt about our ability to continue as a going concern.

OFF-BALANCE SHEET ARRANGEMENTS

None.

CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies, described
below, that are the most important to the portrayal of our current financial
condition and results of operations.

Use of Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Investment Securities

We report investments in debt and marketable equity securities
at fair value based on quoted market prices or, if quoted prices are not
available, discounted expected cash flows using market rates commensurate with
credit quality and maturity of the investment. All investment securities are
designated as available for sale with unrealized gains and losses included in
stockholders' equity. We regularly review investment securities for impairment
based on criteria that include the extent to which the investment's carrying
value exceeds its related market value, the duration of the market decline, our
ability to hold to recovery and the financial strength and specific prospects of
the issuer of the security. Unrealized losses that are other than temporary are
recognized in earnings. Realized gains and losses are accounted for on the
specific identification method.

We periodically review these investments for
other-than-temporary declines in fair value based on the specific identification
method and writes down investments to their fair value when an
other-than-temporary decline has occurred. When determining whether a decline is
other-than-temporary, we examine (i) the length of time and the extent to which
the fair value of an investment has been lower than its carrying value: (ii) the
financial condition and near-term prospects of the investee, including any
specific events that may influence the operations of the investee such as
changes in technology that may impair the earnings potential of the investee:
and (iii) our intent and ability to retain its investment in the investee for a
sufficient period of time to allow for any anticipated recovery in market value.
We generally believe that an other-than-temporary decline has occurred when the
fair value of the investment is below the carrying value for one year, absent of
evidence to the contrary.

27

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Mineral Property Costs

Canyon has been in the exploration stage since its inception on
January 21, 2000, and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition and exploration of mining
properties. Mineral property exploration costs are expensed as incurred. Mineral
property acquisition costs are initially capitalized when incurred using the
guidance in EITF 04-02, Whether Mineral Rights Are Tangible or Intangible
Assets. We assess the carrying costs for impairment under SFAS 144,
Accounting for Impairment or Disposal of Long Lived Assets at each fiscal
quarter end. When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs then incurred to develop such property, are capitalized. Such costs
will be amortized using the units-of-production method over the estimated life
of the probable reserve. If mineral properties are subsequently abandoned or
impaired, any capitalized costs will be charged to operations.

Stock-based Compensation

Prior to January 1, 2006, we accounted for stock-based awards
  under the recognition and measurement provisions of Accounting Principles Board
  Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees”
  using the intrinsic value method of accounting, under which compensation expense
  was only recognized if the exercise price of our employee stock options was
  less than the market price of the underlying common stock on the date of grant.
  Effective January 1, 2006, we adopted the fair value recognition provisions
  of SFAS No. 123R “Share Based Payments,” using the modified prospective
  transition method. Under that transition method, compensation cost is recognized
  for all share-based payments granted prior to, but not yet vested as of January
  1, 2006, based on the grant date fair value estimated in accordance with the
  original provisions of SFAS No. 123, and compensation cost for all share-based
  payments granted subsequent to January 1, 2006, based on the grant-date fair
  value estimated in accordance with the provisions of SFAS 123R. Results for
  prior periods have not been restated. There was no effect on our loss from operations,
  cash flows or loss per share as a result of adopting SFAS No. 123R.

All transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable. Equity
instruments issued to employees and the cost of the services received as
consideration are measured and recognized based on the fair value of the equity
instruments issued.

RISKS AND UNCERTAINTIES

An investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below and the other
information in this Annual Report before investing in our common stock. If any
of the following risks occur, our business, operating results and financial
condition could be seriously harmed. The trading price of our common stock could
decline due to any of these risks, and you may lose all or part of your
investment.

If we do not obtain additional financing, our business will
fail.

Our current operating funds are inadequate to complete our
planned exploration of the New York Canyon Project. Our business plan calls for
significant expenses in connection with the exploration and development of those
mineral claims. As a result, we will require additional financing to complete
our exploration and development plans. We will also require additional financing
if the costs of exploration are greater than anticipated and to sustain our
business operations if we are not successful in earning revenues once
exploration is complete.

We have entered into engagement letters with three underwriters
in connection with a proposed private placement to raise gross proceeds of
$12,000,000. The financing is subject to customary due diligence conditions and
the entry into formal agreements. There is no assurance that we will be able to
complete the financing. Obtaining additional financing would be subject to a
number of factors, the known material factors being market prices for gold and
silver, investor acceptance of our mineral claims, and investor sentiment. These
factors may make the timing, amount, terms or conditions of additional financing
unavailable to us.

28

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If we complete a financing through the sale of additional
shares of our common stock, shareholders will experience dilution.

The most likely source of future financing presently available
to us is through the issuance of our common stock. Any sale of share capital
will result in dilution to existing shareholders. The only other anticipated
alternative for the financing of further exploration would be the offering by us
of an interest in our properties to be earned by another party or parties
carrying out further exploration thereof, which is not presently contemplated.

In order to maintain our rights to the New York Canyon
Project, we will be required to make annual filings with federal and state
regulatory agencies and/or be required to complete assessment work on the New
York Canyon Project.

In order to maintain our rights to the New York Canyon Project,
we will be required to make annual filings with federal and state regulatory
authorities. Currently the amount of these fees is nominal; however, these
maintenance fees are subject to adjustment. In addition, we may be required by
federal and/or state legislation or regulations to complete minimum annual
amounts of mineral exploration work on the New York Canyon Project. A failure by
us to meet the annual maintenance requirements under federal and state laws
could cause our rights to the New York Canyon Project to lapse.

We lack an operating history and have losses which we expect
to continue into the future. As a result, we may have to suspend or cease
exploration activities and if we do not obtain additional financing, our
business will fail.

We were incorporated on January 21, 2000 and to date have been
involved primarily in organizational activities, the acquisition of mineral
claims and the exploration and development on these claims. We have no
exploration history upon which an evaluation of our future success or failure
can be made. Our net loss since inception is $13,682,690. Our ability to achieve
and maintain profitability and positive cash flow is dependent upon:

| | - | our ability to locate a
      profitable mineral property; and
| | - | --------------------------------------------------------------
| | - | our ability to generate revenues.                             

Our plan of operation calls for significant expenses in
connection with the exploration of the New York Project, which will require us
to obtain additional financing. We recorded a net operating loss of $7,692,137
for the year ended June 30, 2006 and have an accumulated deficit of $13,682,690
since inception. As at the date of this Annual Report, we had cash of
approximately $291,149 and for the next twelve months, management anticipates
that the minimum cash requirements to fund our proposed exploration program and
our continued operations will be $4,539,550. Accordingly we do not have
sufficient funds to meet our planned expenditures over the next twelve months
and will need to seek additional financing to meet our planned expenditures.

Obtaining additional financing would be subject to a number of
factors, including the market prices for the mineral property and base and
precious metals. These factors may make the timing, amount, terms or conditions
of additional financing unavailable to us. Since our inception, we have used our
common stock to raise money for our operations and for our property
acquisitions. We have not attained profitable operations and are dependent upon
obtaining financing to pursue our plan of operation. For these reasons, our
independent auditors believe there exists a substantial doubt about our ability
to continue as a going concern.

In order to keep the mineral properties in good standing, we
need to make payments to vendors and operators who have performed work on the
properties; otherwise there is a risk a lien may be placed on the
properties.

We currently owe approximately $313,000 to one vendor/operator
for work performed on our mineral properties. There is a risk that this vendor
can place a lien on the properties for which the work was performed. We are
negotiating with vendor to ensure that amounts due are paid and that we avert
this risk.

29

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Because we have not commenced business operations, we face a
high risk of business failure.

We have not earned any revenues as of the date of this Annual
Report. Potential investors should be aware of the difficulties normally
encountered by new mineral exploration companies and the high rate of failure of
such enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.

We have no known mineral reserves and if we cannot find any,
we will have to cease operations.

We have no mineral reserves. Mineral exploration is highly
speculative. It involves many risks and is often non-productive. Even if we are
able to find mineral reserves on our property our production capability is
subject to further risks including:

| | - | Costs of bringing the property into production including
      exploration work, preparation of production feasibility studies, and
      construction of production facilities, all of which we have not budgeted
      for;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | Availability and costs of financing;                                                                                                                                                                                         
| | - | Ongoing costs of production; and                                                                                                                                                                                             
| | - | Environmental compliance regulations and restraints.                                                                                                                                                                         

The marketability of any minerals acquired or discovered may be
affected by numerous factors which are beyond our control and which cannot be
accurately predicted, such as market fluctuations, the lack of milling
facilities and processing equipment near the New York Canyon Project and such
other factors as government regulations, including regulations relating to
allowable production, exporting of minerals, and environmental protection. If we
do not find a mineral reserve or define a mineral inventory containing gold,
silver, copper, zinc or iron or if we cannot explore the mineral reserve, either
because we do not have the money to do it or because it will not be economically
feasible to do it, we will have to cease operations and you will lose your
investment.

Because we anticipate our operating expenses will increase
prior to our earning revenues, we may never achieve profitability.

Prior to completion of our exploration stage, we anticipate
that we will incur increased operating expenses without realizing any revenues.
We therefore expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from the
exploration of our mineral claims and the production of minerals thereon, if
any, we will not be able to earn profits or continue operations. There is no
history upon which to base any assumption as to the likelihood that we will
prove successful, and we may not be able to ever generate any operating revenues
or achieve profitable operations. If we are unsuccessful in addressing these
risks, our business will most likely fail.

Because of the speculative nature of exploration of mining
properties, there is substantial risk that no commercially exploitable minerals
will be found and our business will fail.

The search for valuable minerals as a business is extremely
risky. We may not find commercially exploitable reserves of gold or silver on
our mineral claims. Exploration for minerals is a speculative venture,
necessarily involving substantial risk. The expenditures to be made by us in the
upcoming exploration of the mineral claims may not result in the discovery of
commercial quantities of ore. Problems such as unusual or unexpected formations
and other conditions are involved in mineral exploration and often result in
unsuccessful exploration efforts. In such a case, we would be unable to complete
our business plan.

Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or damages if and when
we conduct mineral exploration activities.

The search for valuable minerals involves numerous hazards. As
a result, if and when we conduct exploration activities we may become subject to
liability for such hazards, including pollution, cave-ins and

30

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other hazards against which we cannot insure or against which
we may elect not to insure. The payment of such liabilities may have a material
adverse effect on our financial position.

Even if we discover commercial reserves of precious metals
on our optioned mineral claims, we may not be able to successfully obtain
commercial production.

Our optioned mineral claims do not contain any known bodies of
ore. If our exploration programs are successful in discovering ore of commercial
tonnage and grade, we will require additional funds in order to place those
mineral claims into commercial production. At this time, there is a risk that we
will not be able to obtain such financing as and when needed.

If the price of base and precious metals declines, our financial
  condition and ability to obtain future financings will be impaired.

The price of base and precious metals is affected by numerous
factors, all of which are beyond our control. Factors that tend to cause the
price of base and precious metals to decrease include the following:

| | (a) | Sales or leasing of base and precious metals by
      governments and central banks;                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                           
| | (b) | A low rate of inflation and a strong US dollar;                                                                                                                                                                           
| |     |                                                                                                                                                                                                                           
| | (c) | Speculative trading;                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                           
| | (d) | Decreased demand for base and precious metals industrial,
      jewelry and investment uses;                                                                                                                              
| |     |                                                                                                                                                                                                                           
| | (e) | High supply of base and precious metals from production,
      disinvestment, scrap and hedging;                                                                                                                          
| |     |                                                                                                                                                                                                                           
| | (f) | Sales by base and precious metals producers and foreign
      transactions and other hedging transactions; and                                                                                                            
| |     |                                                                                                                                                                                                                           
| | (g) | Devaluing local currencies (relative to base and precious
      metals price in US dollars) leading to lower production costs and higher
      production in certain major base and precious metals producing
    regions.

Our business is dependent on the price of base and precious
metals. We have not undertaken hedging transactions in order to protect us from
a decline in the price of base and precious metals. A decline in the price of
base and precious metals may also decrease our ability to obtain future
financings to fund our planned development and exploration programs.

Because we are an exploration stage company, our business
has a high risk of failure.

As noted in the financial statements that are included with
this Annual Report, we are an exploration stage company that has incurred net
losses since inception, we have not attained profitable operations and we are
dependent upon obtaining adequate financing to complete our exploration
activities. These conditions, as indicated in our audit report on our annual
report on Form 10-KSB, raise substantial doubt as to our ability to continue as
a going concern. The success of our business operations will depend upon our
ability to obtain further financing to complete our planned exploration program
and to attain profitable operations. If we are not able to complete a successful
exploration program and attain sustainable profitable operations, then our
business will fail.

If we are unable to hire and retain key personnel, we may
not be able to implement our business plan.

Our success is dependent upon the performance of key personnel
working full-time in management, supervisory and administrative capacities or as
consultants. This is particularly true in highly technical businesses such as
mineral exploration. These individuals are in high demand and we may not be able
to attract the personnel we need. The loss of the services of senior management
or key personnel could have a material and adverse effect on us, our business
and results of operations. Failure to hire key personnel when needed, or on
acceptable terms, would have a significant negative effect on our business.

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As we undertake exploration of our mineral claims, we will
be subject to compliance with government regulation that may increase the
anticipated cost of our exploration program.

There are several governmental regulations that materially
restrict mineral exploration. We are required to obtain work permits, post bonds
and perform remediation work for any physical disturbance to the land in order
to comply with these laws. If we enter the production phase, the cost of
complying with permit and regulatory environment laws will be greater because
the impact on the project area is greater. Permits and regulations will control
all aspects of the production program if the project continues to that stage.
Examples of regulatory requirements include:

| | (a) | Water discharge will have to meet drinking water
      standards;                                                                               
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                 
| | (b) | Dust generation will have to be minimal or otherwise
      re-mediated;                                                                         
| |     |                                                                                                                                                 
| | (c) | Dumping of material on the surface will have to be
      re-contoured and re-vegetated with natural vegetation;                                 
| |     |                                                                                                                                                 
| | (d) | An assessment of all material to be left on the surface
      will need to be environmentally benign;                                           
| |     |                                                                                                                                                 
| | (e) | Ground water will have to be monitored for any potential
      contaminants;                                                                    
| |     |                                                                                                                                                 
| | (f) | The socio-economic impact of the project will have to be
      evaluated and if deemed negative, will have to be re-mediated;
  and             
| |     |                                                                                                                                                 
| | (g) | There will have to be an impact report of the work on the
      local fauna and flora including a study of potentially endangered
      species.

There is a risk that new regulations could increase our costs
of doing business and prevent us from carrying out our exploration program. We
will also have to sustain the cost of reclamation and environmental remediation
for all exploration work undertaken. Both reclamation and environmental
remediation refer to putting disturbed ground back as close to its original
state as possible. Other potential pollution or damage must be cleaned-up and
renewed along standard guidelines outlined in the usual permits. Reclamation is
the process of bringing the land back to its natural state after completion of
exploration activities. Environmental remediation refers to the physical
activity of taking steps to remediate, or remedy, any environmental damage
caused. The amount of these costs is not known at this time as we do not know
the extent of the exploration program that will be undertaken beyond completion
of the recommended work program. If remediation costs exceed our cash reserves
we may be unable to complete our exploration program and have to abandon our
operations.

If we become subject to increased environmental laws and
regulation, our operating expenses may increase.

Our development and production operations are regulated by both
US Federal and Nevada state environmental laws that relate to the protection of
air and water quality, hazardous waste management and mine reclamation. These
regulations will impose operating costs on us. If the regulatory environment for
our operations changes in a manner that increases costs of compliance and
reclamation, then our operating expenses would increase with the result that our
financial condition and operating results could be adversely affected.

We may conduct further offerings in the future in which case
your shareholdings will be diluted.

Since our inception we have relied on such equity sales of our
common stock to fund our operations. We may conduct further equity offerings in
the future to finance our current projects or to finance subsequent projects
that we decide to undertake. If common stock is issued in return for additional
funds, the price per share could be lower than that paid by our current
stockholders. We anticipate continuing to rely on equity sales of our common
stock in order to fund our business operations. If we issue additional stock,
your percentage interest in us will be lower. This condition is often referred
to as "dilution. The result of this could reduce the value of your stock.

32

---

Because our stock is a penny stock, stockholders will be
more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or quotation
system.

Because our securities constitute "penny stocks" within the
meaning of the rules, the rules apply to us and to our securities. The rules may
further affect the ability of owners of shares to sell our securities in any
market that might develop for them. As long as the trading price of our common
stock is less than $5.00 per share, the common stock will be subject to Rule
15g-9 under the Exchange Act. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock, to deliver a standardized risk
disclosure document prepared by the SEC, that:

|1. | contains a description of the nature and level of risk in
      the market for penny stocks in both public offerings and secondary
      trading;                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                          
|2. | contains a description of the broker's or dealer's duties
      to the customer and of the rights and remedies available to the customer
      with respect to a violation to such duties or other requirements of
      securities laws;
|   |                                                                                                                                                                                                                                          
|3. | contains a brief, clear, narrative description of a
      dealer market, including bid and ask prices for penny stocks and the
      significance of the spread between the bid and ask price;                                           
|   |                                                                                                                                                                                                                                          
|4. | contains a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                       
|   |                                                                                                                                                                                                                                          
|5. | defines significant terms in the disclosure document or
      in the conduct of trading in penny stocks; and                                                                                                                             
|   |                                                                                                                                                                                                                                          
|6. | contains such other information and is in such form,
      including language, type, size and format, as the SEC shall require by
      rule or regulation.                                                                              

The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that, prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock.

33

---

ITEM
7.                
FINANCIAL STATEMENTS.

Index to Financial Statements

|   |                                                                                                                                                     | Page
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|   |                                                                                                                                                     |     
|1. | Report of Independent Registered Public Accounting Firm:                                                                                            | F-1 
|   |                                                                                                                                                     |     
|2. | Audited Financial Statements for the year ended June 30,
      2006, including:                                                                     |     
|   |                                                                                                                                                     |     
|a. | Balance Sheets as at June 30, 2006 and 2005;                                                                                                        | F-2 
|   |                                                                                                                                                     |     
|b. | Statements of Operations for the years ended June 30, 2006
      and 2005 and the period from inception to June 30, 2006;                           | F-3 
|   |                                                                                                                                                     |     
|c. | Statements of Cash Flows for the years ended June 30, 2006
      and 2005 and the period from inception to June 30, 2006;                           | F-4 
|   |                                                                                                                                                     |     
|d. | Statements of Stockholders Equity (Deficit) for the
      years ended June 30, 2006 and 2005 and the period from inception to June
      30, 2006; | F-5 
|   |                                                                                                                                                     |     
|e. | Notes to Financial Statements.                                                                                                                      | F-8 

34

---



Report of Independent Registered Public Accounting Firm

To the Stockholders and Directors 
  of Canyon Copper Corp. (formerly Aberdene Mines Limited) 
  (An Exploration Stage Company)

We have audited the accompanying balance sheets of Canyon Copper
  Corp. (formerly Aberdene Mines Limited) (An Exploration Stage Company) as of
  June 30, 2006 and 2005 and the related statements of operations, cash flows
  and stockholders deficit for the years then ended and accumulated for
  the period from January 21, 2000 (Date of Inception) to June 30, 2006. These
  financial statements are the responsibility of the Companys management.
  Our responsibility is to express an opinion on these financial statements based
  on our audits.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audits to obtain reasonable assurance about whether
  the financial statements are free of material misstatement. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation. We believe that our audits provide
  a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
  fairly, in all material respects, the financial position of Canyon Copper Corp.
  (formerly Aberdene Mines Limited) (An Exploration Stage Company), as of June
  30, 2006 and 2005, and the results of its operations and its cash flows for
  the years then ended and accumulated for the period from January 21, 2000 (Date
  of Inception) to June 30, 2006, in conformity with generally accepted accounting
  principles used in the United States.

The accompanying financial statements have been prepared assuming
  the Company will continue as a going concern. As discussed in Note 1 to the
  financial statements, the Company has not generated any revenue, has a working
  capital deficit and has incurred significant losses since inception. These factors
  raise substantial doubt about the Companys ability to continue as a going
  concern. Managements plans in regard to these matters are also discussed
  in Note 1. The financial statements do not include any adjustments that might
  result from the outcome of this uncertainty.

/s/ Manning Elliott LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

October 6, 2006

F-1

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Balance Sheets 
  (Expressed in U.S. dollars)

|                                                               |  | June 30,    |   |  | June 30,   |  
|-------------------------------------------------------------- |  | ----------- | - |  | ---------- | -
|                                                               |  | 2006        |   |  | 2005       |  
|                                                               |  | $           |   |  | $          |  
|                                                               |  |             |   |  |            |  
|                                                               |  |             |   |  |            |  
|ASSETS                                                         |  |             |   |  |            |  
|Current Assets                                                 |  |             |   |  |            |  
|Cash                                                           |  | 139,750     |   |  | 48,816     |  
|Amount receivable                                              |  | 3,000       |   |  |           |  
|Investment securities                                          |  | 224,053     |   |  | 294,077    |  
|Prepaid
      expenses and deposits                            |  | 26,362      |   |  | 10,082     |  
|Total Current Assets                                           |  | 393,165     |   |  | 352,975    |  
|Property and Equipment
      (Note 3)                          |  | 10,811      |   |  | 4,221      |  
|Total Assets                                                   |  | 403,976     |   |  | 357,196    |  
|                                                               |  |             |   |  |            |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                          |  |             |   |  |            |  
|Current Liabilities                                            |  |             |   |  |            |  
|Accounts payable                                               |  | 377,811     |   |  | 70,635     |  
|Accrued liabilities (Note 5)                                   |  | 220,906     |   |  | 44,698     |  
|Due to related parties (Note 6)                                |  | 9,092       |   |  | 58,633     |  
|Convertible
      debentures (Note 7)                          |  | 284,999     |   |  |           |  
|Total Current Liabilities                                      |  | 892,808     |   |  | 173,966    |  
|Convertible Debentures
      (Note 7)                          |  |            |   |  | 284,999    |  
|Total Liabilities                                              |  | 892,808     |   |  | 458,965    |  
|Contingencies and Commitments (Notes 1 and 11)                 |  |             |   |  |            |  
|Subsequent Events (Note 13)                                    |  |             |   |  |            |  
|Stockholders Deficit                                          |  |             |   |  |            |  
|Preferred Stock                                                |  |             |   |  |            |  
|Authorized: 100,000,000 shares, par value $0.00001             |  |             |   |  |            |  
|Issued and outstanding: 500,000
      shares                   |  | 5           |   |  | 5          |  
|Common Stock                                                   |  |             |   |  |            |  
|Authorized: 500,000,000 shares,
      par value $0.00001       |  |             |   |  |            |  
|Issued and outstanding: 65,705,596 shares and
      53,991,852 |  |             |   |  |            |  
|shares, respectively                                           |  | 658         |   |  | 540        |  
|Additional Paid-in Capital                                     |  | 13,193,195  |   |  | 6,325,951  |  
|Accumulated Other Comprehensive Loss                           |  |            |   |  | (437,712   | )
|Deficit Accumulated
      During the Exploration Stage         |  | (13,682,690 | ) |  | (5,990,553 | )
|Total Stockholders Deficit                                    |  | (488,832    | ) |  | (101,769   | )
|Total Liabilities
      and Stockholders Deficit              |  | 403,976     |   |  | 357,196    |  

The Accompanying Notes are an Integral Part of These Financial
  Statements 
  F-2

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Statements of Operations 
  (Expressed in U.S. dollars)

|                                                |  | Accumulated from    |   |  |            |   |  |            |  
|----------------------------------------------- |  | ------------------- | - |  | ---------- | - |  | ---------- | -
|                                                |  | January 21, 2000    |   |  | For the    |  
|                                                |  | (Date of Inception) |   |  | Year Ended |  
|                                                |  | to June 30,         |   |  | June 30,   |  
|                                                |  | 2006                |   |  | 2006       |   |  | 2005       |  
|                                                |  | $                   |   |  | $          |   |  | $          |  
|Revenue                                         |  |                    |   |  |           |   |  |           |  
|                                                |  |                     |   |  |            |   |  |            |  
|Expenses                                        |  |                     |   |  |            |   |  |            |  
|Depreciation                                    |  | 5,540               |   |  | 3,532      |   |  | 1,002      |  
|Foreign exchange loss
      (gain)              |  | (26,812             | ) |  | 12,900     |   |  | (39,712    | )
|General and administrative                      |  | 6,832,135           |   |  | 4,301,001  |   |  | 1,064,799  |  
|Impairment of mineral
      property costs      |  | 2,281,542           |   |  | 405,000    |   |  | 1,876,500  |  
|Mineral exploration costs                       |  | 3,597,667           |   |  | 2,509,786  |   |  | 592,582    |  
|Total Operating Expenses                        |  | 12,690,072          |   |  | 7,232,219  |   |  | 3,495,171  |  
|Operating Loss                                  |  | (12,690,072         | ) |  | (7,232,219 | ) |  | (3,495,171 | )
|Other Expenses                                  |  |                     |   |  |            |   |  |            |  
|Interest on convertible debentures              |  | (223,338            | ) |  | (27,571    | ) |  | (193,297   | )
|Impairment loss on investment
      securities  |  | (354,979            | ) |  | (354,979   | ) |  |           |  
|Loss on sale of investment securities           |  | (411,430            | ) |  | (88,332    | ) |  | (323,098   | )
|Gain (Loss) on settlement of related party debt |  | (2,871              | ) |  | 10,964     |   |  | (13,835    | )
|Total Other Expenses                            |  | (992,618            | ) |  | (459,918   | ) |  | (530,230   | )
|Net Loss                                        |  | (13,682,690         | ) |  | (7,692,137 | ) |  | (4,025,401 | )
|Other Comprehensive Loss                        |  |                     |   |  |            |   |  |            |  
|Unrealized loss on investment securities        |  |                    |   |  |           |   |  | (437,712   | )
|Comprehensive Loss                              |  | (13,682,690         | ) |  | (7,692,137 | ) |  | (4,463,113 | )
|Net Loss Per Share  Basic and Diluted          |  |                     |   |  | (0.13      | ) |  | (0.06      | )
|                                                |  |                     |   |  |            |   |  |            |  
|Weighted Average Shares Outstanding             |  |                     |   |  | 60,903,000 |   |  | 65,202,000 |  

The Accompanying Notes are an Integral Part of These Financial
  Statements 
  F-3

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Statements of Cash Flows 
  (Expressed in U.S. dollars)

|                                                                 |  | Accumulated from    |   |  |            |   |  |            |  
|---------------------------------------------------------------- |  | ------------------- | - |  | ---------- | - |  | ---------- | -
|                                                                 |  | January 21, 2000    |   |  | For the    |  
|                                                                 |  | (Date of Inception) |   |  | Year Ended |  
|                                                                 |  | to June 30,         |   |  | June 30,   |  
|                                                                 |  | 2006                |   |  | 2006       |   |  | 2005       |  
|                                                                 |  | $                   |   |  | $          |   |  | $          |  
|Operating Activities                                             |  |                     |   |  |            |   |  |            |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Net loss                                                         |  | (13,682,690         | ) |  | (7,692,137 | ) |  | (4,025,401 | )
|                                                                 |  |                     |   |  |            |   |  |            |  
|Adjustments to reconcile net
      loss to net cash used in      |  |                     |   |  |            |   |  |            |  
|operating activities:                                            |  |                     |   |  |            |   |  |            |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Depreciation                                                     |  | 5,540               |   |  | 3,532      |   |  | 1,002      |  
|Foreign
      exchange translation loss (gain)                   |  | (25,695             | ) |  | 16,302     |   |  | (41,997    | )
|Impairment of mineral property
      costs                       |  | 2,281,542           |   |  | 405,000    |   |  | 1,876,500  |  
|Intrinsic
      value of beneficial conversion option            |  | 180,183             |   |  |           |   |  | 180,183    |  
|Impairment loss on investment
      securities                   |  | 354,979             |   |  | 354,979    |   |  |           |  
|Loss on
      sale of investment securities                      |  | 411,430             |   |  | 88,332     |   |  | 323,098    |  
|Loss (gain) on settlement
      of related party debt            |  | 2,871               |   |  | (10,964    | ) |  | 13,835     |  
|Stock-based
      compensation                                   |  | 3,920,808           |   |  | 3,229,195  |   |  | 418,144    |  
|Stock issued for mineral
      exploration costs                 |  | 9,750               |   |  | 9,750      |   |  |           |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Changes in operating assets and liabilities:                     |  |                     |   |  |            |   |  |            |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Amount receivable                                                |  | (3,000              | ) |  | (3,000     | ) |  |           |  
|Prepaid expenses
      and deposits                              |  | (26,362             | ) |  | (16,280    | ) |  | 9,761      |  
|Accounts payable and accrued liabilities                         |  | 601,187             |   |  | 483,384    |   |  | 75,561     |  
|Due to related parties                                           |  | 104,419             |   |  | (14,992    | ) |  | 100,289    |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Net Cash Used in Operating Activities                            |  | (5,865,038          | ) |  | (3,146,899 | ) |  | (1,069,025 | )
|                                                                 |  |                     |   |  |            |   |  |            |  
|Investing Activities                                             |  |                     |   |  |            |   |  |            |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Mineral property costs                                           |  | (120,000            | ) |  | (120,000   | ) |  |           |  
|Proceeds from the sale of investment securities                  |  | 417,251             |   |  | 48,123     |   |  | 369,128    |  
|Purchase of property and equipment                               |  | (16,351             | ) |  | (10,122    | ) |  | (3,212     | )
|                                                                 |  |                     |   |  |            |   |  |            |  
|Net Cash Used in Investing Activities                            |  | 280,900             |   |  | (81,999    | ) |  | 365,916    |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Financing Activities                                             |  |                     |   |  |            |   |  |            |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Proceeds from issuance
      of convertible debentures           |  | 1,184,655           |   |  |           |   |  | 284,999    |  
|Issuance of common stock                                         |  | 4,761,901           |   |  | 3,542,500  |   |  | 200,000    |  
|Share issuance costs                                             |  | (222,668            | ) |  | (222,668   | ) |  |           |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Net Cash Provided by Financing Activities                        |  | 5,723,888           |   |  | 3,319,832  |   |  | 484,999    |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Increase (Decrease) in Cash                                      |  | 139,750             |   |  | 90,934     |   |  | (218,110   | )
|                                                                 |  |                     |   |  |            |   |  |            |  
|Cash  Beginning of Period                                       |  |                    |   |  | 48,816     |   |  | 266,926    |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Cash  End of Period                                             |  | 139,750             |   |  | 139,750    |   |  | 48,816     |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Non-cash Investing and Financing Activities:                     |  |                     |   |  |            |   |  |            |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Preferred stock issued
      for investment securities           |  | 1,535,575           |   |  |           |   |  | 1,535,575  |  
|Investment securities used to pay the
      finders fee for the |  |                     |   |  |            |   |  |            |  
|preferred
      stock issuance                                   |  | 153,557             |   |  |           |   |  | 153,557    |  
|Stock issued to settle related party debt                        |  | 98,198              |   |  | 23,585     |   |  | 73,124     |  
|Stock issued for mineral property acquisition costs              |  | 2,161,542           |   |  | 285,000    |   |  | 1,876,500  |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Supplemental Disclosures:                                        |  |                     |   |  |            |   |  |            |  
|                                                                 |  |                     |   |  |            |   |  |            |  
|Interest paid                                                    |  |                    |   |  |           |   |  |           |  
|Income taxes paid                                                |  |                    |   |  |           |   |  |           |  

The Accompanying Notes are an Integral Part of These Financial
  Statements 
  F-4

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Statement of Stockholders Equity (Deficit) 
  From January 21, 2000 (Date of Inception) to June 30, 2006
  (Expressed in US dollars)

|                         |                 |  |              |  |             |   |        |   |           |   |            |  |               |  | Deficit     |   |            |  
|------------------------ | --------------- |  | ------------ |  | ----------- | - | ------ | - | --------- | - | ---------- |  | ------------- |  | ----------- | - | ---------- | -
|                         |                 |  |              |  |             |   |        |   |           |   |            |  | Accumulated   |  | Accumulated |   |            |  
|                         | Preferred Stock |  | Common Stock |  | Additional  |   | Common |   | Other     |   | During the |  |               | 
|                         |                 |  | Par          |  |             |   | Par    |   | Paid-in   |   | Stock      |  | Comprehensive |  | Exploration |   |            |  
|                         | Shares          |  | Value        |  | Shares      |   | Value  |   | Capital   |   | Subscribed |  | Loss          |  | Stage       |   | Total      |  
|                         | #               |  | $            |  | #           |   | $      |   | $         |   | $          |  | $             |  | $           |   | $          |  
|                         |                 |  |              |  |             |   |        |   |           |   |            |  |               |  |             |   |            |  
|Balance  January 21,    |                 |  |              |  |             |   |        |   |           |   |            |  |               |  |             |   |            |  
|2000 (Date of Inception) |                |  |             |  |            |   |       |   |          |   |           |  |              |  |            |   |           |  
|Issuance of stock for    |                 |  |              |  |             |   |        |   |           |   |            |  |               |  |             |   |            |  
|services and payment of  |                 |  |              |  |             |   |        |   |           |   |            |  |               |  |             |   |            |  
|advances for $0.002 per  |                 |  |              |  |             |   |        |   |           |   |            |  |               |  |             |   |            |  
|share                    |                |  |             |  | 138,000,000 |   | 1,380  |   | 273,620   |   |           |  |              |  |            |   | 275,000    |  
|Net loss for the period  |                |  |             |  |            |   |       |   |          |   |           |  |              |  | (290,820    | ) | (290,820   | )
|Balance  June 30, 2000  |                |  |             |  | 138,000,000 |   | 1,380  |   | 273,620   |   |           |  |              |  | (290,820    | ) | (15,820    | )
|Net loss for the year    |                |  |             |  |            |   |       |   |          |   |           |  |              |  | (11,766     | ) | (11,766    | )
|Balance  June 30, 2001  |                |  |             |  | 138,000,000 |   | 1,380  |   | 273,620   |   |           |  |              |  | (302,586    | ) | (27,586    | )
|Issuance of stock for    |                 |  |              |  |             |   |        |   |           |   |            |  |               |  |             |   |            |  
|cash at $0.0036 per      |                 |  |              |  |             |   |        |   |           |   |            |  |               |  |             |   |            |  
|share                    |                |  |             |  | 20,534,814  |   | 205    |   | 74,196    |   |           |  |              |  |            |   | 74,401     |  
|Net loss for the year    |                |  |             |  |            |   |       |   |          |   |           |  |              |  | (43,817     | ) | (43,817    | )
|Balance  June 30, 2002  |                |  |             |  | 158,534,814 |   | 1,585  |   | 347,816   |   |           |  |              |  | (346,403    | ) | 2,998      |  
|Net loss for the year    |                |  |             |  |            |   |       |   |          |   |           |  |              |  | (17,713     | ) | (17,713    | )
|Balance  June 30, 2003  |                |  |             |  | 158,534,814 |   | 1,585  |   | 347,816   |   |           |  |              |  | (364,116    | ) | (14,715    | )
|Cancellation of stock    |                 |  |              |  |             |   |        |   |           |   |            |  |               |  |             |   |            |  
|owned by a director      |                |  |             |  | (88,000,000 | ) | (880   | ) | 880       |   |           |  |              |  |            |   |           |  
|Conversion of            |                 |  |              |  |             |   |        |   |           |   |            |  |               |  |             |   |            |  
|debentures               |                |  |             |  |            |   |       |   |          |   | 902,126    |  |              |  |            |   | 902,126    |  
|Issuance of stock for    |                 |  |              |  |             |   |        |   |           |   |            |  |               |  |             |   |            |  
|cash at $1.50 per share  |                |  |             |  | 700,000     |   | 7      |   | 1,049,993 |   |           |  |              |  |            |   | 1,050,000  |  
|Stock issuance costs     |                |  |             |  |            |   |       |   | (105,000  | ) |           |  |              |  |            |   | (105,000   | )
|Net loss for the year    |                |  |             |  |            |   |       |   |          |   |           |  |              |  | (1,601,036  | ) | (1,601,036 | )
|Balance  June 30, 2004  |                |  |             |  | 71,234,814  |   | 712    |   | 1,293,689 |   | 902,126    |  |              |  | (1,965,152  | ) | 231,375    |  

The Accompanying Notes are an Integral Part of These Financial
  Statements 
  F-5

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Statement of Stockholders Equity (Deficit) 
  From January 21, 2000 (Date of Inception) to June 30, 2006 
  (Expressed in US dollars)

|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   | Deficit     |   |            |  
|------------------------- | --------------- |  | ------------ |  | ----------- | - | ------ | - | --------- | - | ---------- | - | ------------- | - | ----------- | - | ---------- | -
|                          |                 |  |              |  |             |   |        |   |           |   |            |   | Accumulated   |   | Accumulated |   |            |  
|                          | Preferred Stock |  | Common Stock |  | Additional  |   | Common |   | Other     |   | During the |   |               |  
|                          |                 |  | Par          |  |             |   | Par    |   | Paid-in   |   | Stock      |   | Comprehensive |   | Exploration |   |            |  
|                          | Shares          |  | Value        |  | Shares      |   | Value  |   | Capital   |   | Subscribed |   | Loss          |   | Stage       |   | Total      |  
|                          | #               |  | $            |  | #           |   | $      |   | $         |   | $          |   | $             |   | $           |   | $          |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Balance  June 30, 2004   |                |  |             |  | 71,234,814  |   | 712    |   | 1,293,689 |   | 902,126    |   |              |   | (1,965,152  | ) | 231,375    |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Issuance of stock for     |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|consulting services       |                |  |             |  | 400,000     |   | 4      |   | 761,996   |   |           |   |              |   |            |   | 762,000    |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Cancellation of stock     |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|issued for consulting     |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|services                  |                |  |             |  | (200,000    | ) | (2     | ) | (727,998  | ) |           |   |              |   |            |   | (728,000   | )
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Issuance of stock         |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|pursuant to exercise of   |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|options                   |                |  |             |  | 400,000     |   | 4      |   | 199,996   |   |           |   |              |   |            |   | 200,000    |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Issuance of stock         |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|pursuant to conversion    |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|of debentures             |                |  |             |  | 549,405     |   | 6      |   | 902,120   |   | (902,126   | ) |              |   |            |   |           |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Issuance of stock         |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|pursuant to mineral       |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|property option           |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|agreements                |                |  |             |  | 1,410,000   |   | 14     |   | 1,876,486 |   |           |   |              |   |            |   | 1,876,500  |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Issuance of stock to      |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|settle related party debt |                |  |             |  | 197,633     |   | 2      |   | 73,122    |   |           |   |              |   |            |   | 73,124     |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Cancellation of stock     |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|owned by the President    |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|of the Company            |                |  |             |  | (20,000,000 | ) | (200   | ) | 200       |   |           |   |              |   |            |   |           |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Issuance of preferred     |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|stock for investment      |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|securities                | 500,000         |  | 5            |  |            |   |       |   | 1,382,013 |   |           |   |              |   |            |   | 1,382,018  |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Unrealized loss on        |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|investment                |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|securities                |                |  |             |  |            |   |       |   |          |   |           |   | (437,712      | ) |            |   | (437,712   | )
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Fair value of stock       |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|options granted           |                |  |             |  |            |   |       |   | 384,144   |   |           |   |              |   |            |   | 384,144    |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Intrinsic value of        |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|beneficial conversion     |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|option of convertible     |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|debentures                |                |  |             |  |            |   |       |   | 180,183   |   |           |   |              |   |            |   | 180,183    |  
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Net loss for the year     |                |  |             |  |            |   |       |   |          |   |           |   |              |   | (4,025,401  | ) | (4,025,401 | )
|                          |                 |  |              |  |             |   |        |   |           |   |            |   |               |   |             |   |            |  
|Balance  June 30, 2005   | 500,000         |  | 5            |  | 53,991,852  |   | 540    |   | 6,325,951 |   |           |   | (437,712      | ) | (5,990,553  | ) | (101,769   | )

The Accompanying Notes are an Integral Part of These Financial
  Statements 
  F-6

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Statement of Stockholders Equity (Deficit) 
  From January 21, 2000 (Date of Inception) to June 30, 2006 
  (Expressed in US dollars)

|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   | Deficit     |   |            |  
|--------------------------- | --------------- |  | ------------ |  | ---------- |  | ------ |  | ---------- | - | ---------- |  | ------------- | - | ----------- | - | ---------- | -
|                            |                 |  |              |  |            |  |        |  |            |   |            |  | Accumulated   |   | Accumulated |   |            |  
|                            | Preferred Stock |  | Common Stock |  | Additional |  | Common |  | Other      |   | During the |  |               |  
|                            |                 |  | Par          |  |            |  | Par    |  | Paid-in    |   | Stock      |  | Comprehensive |   | Exploration |   |            |  
|                            | Shares          |  | Value        |  | Shares     |  | Value  |  | Capital    |   | Subscribed |  | Loss          |   | Stage       |   | Total      |  
|                            | #               |  | $            |  | #          |  | $      |  | $          |   | $          |  | $             |   | $           |   | $          |  
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Balance  June 30, 2005     | 500,000         |  | 5            |  | 53,991,852 |  | 540    |  | 6,325,951  |   |           |  | (437,712      | ) | (5,990,553  | ) | (101,769   | )
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Issuance of stock for       |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|cash at $0.25 per share     |                |  |             |  | 5,000,000  |  | 50     |  | 1,249,950  |   |           |  |              |   |            |   | 1,250,000  |  
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Issuance of stock for       |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|cash at $0.30 per share     |                |  |             |  | 1,500,000  |  | 15     |  | 449,985    |   |           |  |              |   |            |   | 450,000    |  
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Issuance of stock for       |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|geological data a fair      |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|value of at $0.39 per share |                |  |             |  | 25,000     |  |       |  | 9,750      |   |           |  |              |   |            |   | 9,750      |  
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Issuance of stock to        |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|settle debt at a fair       |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|value of$0.37 per share     |                |  |             |  | 63,744     |  | 1      |  | 23,584     |   |           |  |              |   |            |   | 23,585     |  
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Issuance of stock for       |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|cash at $0.40 per share     |                |  |             |  | 4,475,000  |  | 45     |  | 1,789,955  |   |           |  |              |   |            |   | 1,790,000  |  
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Share issuance costs        |                |  |             |  |           |  |       |  | (222,668   | ) |           |  |              |   |            |   | (222,668   | )
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Issuance of stock           |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|pursuant to a mineral       |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|property agreement          |                |  |             |  | 500,000    |  | 5      |  | 284,995    |   |           |  |              |   |            |   | 285,000    |  
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Fair value of stock         |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|options granted             |                |  |             |  |           |  |       |  | 3,229,195  |   |           |  |              |   |            |   | 3,229,195  |  
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Issuance of stock           |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|pursuant to the             |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|exercise of stock           |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|options                     |                |  |             |  | 150,000    |  | 2      |  | 52,498     |   |           |  |              |   |            |   | 52,500     |  
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Unrealized loss on          |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|investment securities       |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|recognized as an            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|impairment loss             |                |  |             |  |           |  |       |  |           |   |           |  | 437,712       |   |            |   | 437,712    |  
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Net loss for the year       |                |  |             |  |           |  |       |  |           |   |           |  |              |   | (7,692,137  | ) | (7,692,137 | )
|                            |                 |  |              |  |            |  |        |  |            |   |            |  |               |   |             |   |            |  
|Balance  June 30, 2006     | 500,000         |  | 5            |  | 65,705,596 |  | 658    |  | 13,193,195 |   |           |  |              |   | (13,682,690 | ) | (488,832   | )

The Accompanying Notes are an Integral Part of These Financial
  Statements 
  F-7

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Notes to the Financial Statements 
  (Expressed in U.S. dollars)

|1. | Nature of Operations and Continuance of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company was incorporated in the State
        of Nevada, U.S.A. on January 21, 2000 under the name Aberdene Mines Limited.
        On August 7, 2006, the Company changed its name to Canyon Copper Corp.
        The Company is an Exploration Stage Company, as defined by Statement of
        Financial Accounting Standard (SFAS) No. 7 Accounting
        and Reporting by Development Stage Enterprises. The Companys
        principal business plan is to acquire, explore and develop mineral properties
        and ultimately seek earnings by exploiting mineral claims.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company has been in the exploration stage
        since its formation in January 2000 and has not yet realized any revenues
        from its planned operations. It is primarily engaged in the acquisition,
        exploration and development of mining properties. Upon location of a commercial
        mineable reserve, the Company will actively prepare the site for extraction
        and enter a development stage. At present, management devotes most of
        its activities to raise sufficient funds to further explore and develop
        its mineral properties. Planned principal activities have not yet begun.
        The ability of the Company to emerge from the exploration stage with respect
        to any planned principal business activity is dependent upon its successful
        efforts to raise additional equity financing and/or attain profitable
        mining operations. The Company has a working capital deficit of $499,643
        as at June 30, 2006 and has accumulated losses from inception to June
        30, 2006 totalling $13,682,690. The Company also has significant mineral
        property acquisition and exploration commitments. There is no guarantee
        that the Company will be able to complete any of the above objectives.
        These factors raise substantial doubt regarding the Companys ability
        to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Managements plan is to continue raising
        additional funds through future equity or debt financings. See Note 13
        for subsequent financing received.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-8

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Notes to the Financial Statements 
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | e)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | f)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | g)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | h)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | i)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | j)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | k)                                                            
|   |                                                               
|   | l)                                                            
|   |                                                               
|   |                                                               

F-9

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Notes to the Financial Statements 
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | m)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | n)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               

| |                       | For the Year Ended |  | For the Year Ended | 
| | --------------------- | ------------------ |  | ------------------ | 
| |                       | June 30,           |  | June 30,           | 
| |                       | 2006               |  | 2005               | 
| |                       | $                  |  | $                  | 
| |                       |                    |  |                    | 
| |                       |                    |  |                    | 
| | Risk-free Rate        | 4.71%              |  | 3.66%              | 
| | Expected Volatility   | 144%               |  | 225%               | 
| | Expected Life         | 1.88 years         |  | 2.50 years         | 
| | Expected Dividends    | NIL                |  | NIL                | 
| | Fair Value Per Option | $0.38              |  | $0.35              | 

During the year ended June 30, 2006,
  the Company recorded stock-based compensation of $3,229,195 as general and administrative
  expense.

F-10

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Notes to the Financial Statements 
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | n)                                                            
|   |                                                               
|   |                                                               

| |                                                            |  | For the Year Ended |  
| | ---------------------------------------------------------- |  | ------------------ | -
| |                                                            |  | June 30,           |  
| |                                                            |  | 2005               |  
| |                                                            |  | $                  |  
| |                                                            |  |                    |  
| |                                                            |  |                    |  
| | Net loss  as reported                                     |  | (4,025,401         | )
| | Add: Stock-based compensation expense included in net      |  |                    |  
| | loss  as reported                                         |  | 211,000            |  
| | Deduct: Stock-based compensation expense                   |  |                    |  
| | determined under fair value method                         |  | (1,094,710         | )
| |                                                            |  |                    |  
| | Net loss  pro forma                                       |  | (4,909,111         | )
| |                                                            |  |                    |  
| | Net loss per share (basic and diluted) 
      as reported |  | (0.06              | )
| | Net loss per share (basic and diluted)  pro forma         |  | (0.08              | )

| | o) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | In February, 2006, the Financial Accounting Standards
        Board (FASB) issued SFAS No. 155 Accounting for Certain
        Hybrid Financial Instruments and in March 2006, the FASB issued
        SFAS No. 156 Accounting for Servicing of Financial Assets,but they will not have any relationship to the operations of the Company.
        Therefore a description and its impact for each on the Companys
        operations and financial position have not been disclosed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | In May 2005, FASB issued SFAS No. 154, “Accounting
        Changes and Error Corrections – A Replacement of APB Opinion No.
        20 and SFAS No. 3”. SFAS No. 154 changes the requirements for the
        accounting for and reporting of a change in accounting principle and applies
        to all voluntary changes in accounting principle. It also applies to changes
        required by an accounting pronouncement in the unusual instance that the
        pronouncement does not include specific transition provisions. SFAS No.
        154 requires retrospective application to prior periods’ financial
        statements of changes in accounting principle, unless it is impracticable
        to determine either the period-specific effects or the cumulative effect
        of the change. The provisions of SFAS No. 154 are effective for accounting
        changes and correction of errors made in fiscal years beginning after
        December 15, 2005. The adoption of this standard is not expected to have
        a material effect on the Company’s results of operations or financial
        position.                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | In December 2004, the FASB issued SFAS No. 153, Exchanges
        of Nonmonetary Assets - An Amendment of APB Opinion No. 29. The
        guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions,
        is based on the principle that exchanges of nonmonetary assets should
        be measured based on the fair value of the assets exchanged. The guidance
        in that Opinion, however, included certain exceptions to that principle.
        SFAS No. 153 amends Opinion No. 29 to eliminate the exception for nonmonetary
        exchanges of similar productive assets and replaces it with a general
        exception for exchanges of nonmonetary assets that do not have commercial
        substance. A nonmonetary exchange has commercial substance if the future
        cash flows of the entity are expected to change significantly as a result
        of the exchange. The provisions of SFAS No. 153 are effective for nonmonetary
        asset exchanges occurring in fiscal periods beginning after June 15, 2005.
        Early application is permitted and companies must apply the standard prospectively.
        The adoption of this standard did not have a material effect on the Companys
        results of operations or financial position.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | p) | Reclassifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | Certain reclassifications have been made to the prior
        periods financial statements to conform to the current periods
        presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

F-11

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Notes to the Financial Statements 
  (Expressed in U.S. dollars)

|3. | Property and Equipment
|-- | ----------------------

| |                    |  |        |  |  |              |  |  | June 30,     |  |  | June 30,     | 
| | ------------------ |  | ------ |  |  | ------------ |  |  | ------------ |  |  | ------------ | 
| |                    |  |        |  |  |              |  |  | 2006         |  |  | 2005         | 
| |                    |  |        |  |  | Accumulated  |  |  | Net Carrying |  |  | Net Carrying | 
| |                    |  | Cost   |  |  | Depreciation |  |  | Value        |  |  | Value        | 
| |                    |  | $      |  |  | $            |  |  | $            |  |  | $            | 
| |                    |  |        |  |  |              |  |  |              |  |  |              | 
| | Computer equipment |  | 6,229  |  |  | 4,084        |  |  | 2,145        |  |  | 4,221        | 
| | Office furniture   |  | 10,122 |  |  | 1,456        |  |  | 8,666        |  |  |             | 
| |                    |  |        |  |  |              |  |  |              |  |  |              | 
| |                    |  | 16,351 |  |  | 5,540        |  |  | 10,811       |  |  | 4,221        | 

|4. | Mineral Properties 
|-- | -------------------
|   |                    
|   | a)                 
|   |                    
|   | b)                 
|   |                    
|5. | Accrued Liabilities

| |                                            |  | June 30, |  |  | June 30, | 
| | ------------------------------------------ |  | -------- |  |  | -------- | 
| |                                            |  | 2006     |  |  | 2005     | 
| |                                            |  | $        |  |  | $        | 
| |                                            |  |          |  |  |          | 
| | Interest accrued on convertible debentures |  | 37,579   |  |  | 13,114   | 
| | Mineral exploration expenditures           |  | 181,277  |  |  | 7,598    | 
| | Professional fees and other accruals       |  | 2,050    |  |  | 23,986   | 
| |                                            |  |          |  |  |          | 
| |                                            |  | 220,906  |  |  | 44,698   | 

|6. | Related Party Transactions
|-- | --------------------------
|   |                           
|   | a)                        
|   |                           
|   |                           
|   |                           
|   | b)                        

F-12

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Notes to the Financial Statements 
  (Expressed in U.S. dollars)

|6. | Related Party Transactions (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|7. | Convertible Debentures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In accordance with EITF 98-5 Accounting
        for Convertible Securities with Beneficial Conversion Features or Contingently
        Adjustable Conversion Ratios,the Company has recognized the
        intrinsic value of the beneficial conversion option of $180,183 as additional
        paid-in capital and interest expense in fiscal 2005. The Company will
        record the fair value of the warrants upon conversion of the convertible
        debentures in accordance with EITF 00-27 Application of Issue
        No. 98-5 to Certain Convertible Instruments.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-13

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Notes to the Financial Statements 
  (Expressed in U.S. dollars)

|7. | Convertible Debentures (continued)
|-- | ----------------------------------
|   |                                   
|   | e)                                
|   |                                   
|   |                                   
|   |                                   
|8. | Common Stock                      
|   |                                   
|   | For the year ended June 30, 2006: 
|   |                                   
|   | a)                                
|   |                                   
|   | b)                                
|   |                                   
|   | c)                                
|   |                                   
|   | d)                                
|   |                                   
|   | e)                                
|   |                                   
|   | f)                                
|   |                                   
|   | g)                                
|   |                                   
|   | h)                                
|   |                                   
|   | For the year ended June 30, 2005: 
|   |                                   
|   | a)                                
|   |                                   
|   | b)                                
|   |                                   
|   | c)                                
|   |                                   
|   | d)                                
|   |                                   
|   | e)                                
|   |                                   
|   | f)                                
|   |                                   
|   | g)                                

F-14

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Notes to the Financial Statements 
  (Expressed in U.S. dollars)

|9. | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On April 5, 2006, the Company established a 2006 Stock
        Incentive Plan (the 2006 Plan) to issue up to a maximum of
        10,000,000 shares of common stock. The maximum aggregate number of shares
        of common stock that may be optioned and sold under the 2006 Plan will
        be increased effective the first day of each of the Companys fiscal
        quarters commencing April 1, 2006, by an amount equal the lesser of (i)
        15% of the total increase in the number of shares of common stock outstanding
        during the previous fiscal quarter, or (ii) a lesser number of shares
        of common stock as determined by the board of directors. The exercise
        price for consultants can not be less than 75% of the fair market value
        of the common stock on the grant date. The exercise price for all others
        can not be less than 100% of the fair market value of the common stock
        on the grant date for incentive stock options and can not be less than
        75% of the fair market value of the common stock on the grant date for
        non-qualified stock options. The Plan Administrator shall establish the
        option term or, if not so established, shall be ten years from the grant
        date.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | A summary of the Companys stock option activity
        is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |                            |  | Year Ended    |   |   | Year Ended       | 
| | -------------------------- |  | ------------- | - | - | ---------------- | 
| |                            |  | June 30, 2006 |   |   | June 30, 2005    | 
| |                            |  |               |   |   |                  | 
| |                            |  | Number of     |   |   | Weighted Average | 
| |                            |  | Options       |   |   | Exercise Price   | 
| | Balance, Beginning of Year |  | 3,000,000     |   | $ | 0.30             | 
| | Granted                    |  | 8,550,000     |   |   | 0.50             | 
| | Cancelled/Forfeited        |  |              |   |   |                 | 
| | Exercised                  |  | (150,000      | ) |   | 0.35             | 
| | Balance, End of Year       |  | 11,400,000    |   | $ | 0.45             | 

As at June 30, 2006, the following options
  are outstanding:

Outstanding and ExercisableWeighted AverageExercise
      Number of
      Remaining Contractual
      Weighted AveragePrice
      Shares
      Life
        (years)
      Exercise Price$ 0.30
      3,000,000
      3.78
      $ 0.30$ 0.50
      8,400,000
      3.50
      $ 0.5011,400,000
      3.58
      $ 0.45


|10. | Share Purchase Warrants                                                         
|--- | --------------------------------------------------------------------------------
|    |                                                                                 
|    | The following table summarizes the continuity of the
        Companys warrants:

| |                                 |  |           |  |  | Weighted       | 
| | ------------------------------- |  | --------- |  |  | -------------- | 
| |                                 |  |           |  |  | average        | 
| |                                 |  | Number of |  |  | exercise price | 
| |                                 |  | Warrants  |  |  | $              | 
| |                                 |  |           |  |  |                | 
| | Balance, June 30, 2004 and 2005 |  |          |  |  |               | 
| | Issued                          |  | 4,475,000 |  |  | 0.50           | 
| |                                 |  |           |  |  |                | 
| | Balance, June 30,
      2006    |  | 4,475,000 |  |  | 0.50           | 

As at June 30, 2006, the following share
  purchase warrants were outstanding:

Number of
      Exercise PriceWarrants
      $
      Expiry Date4,475,000
      0.50
      March 16, 2008


F-15

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Notes to the Financial Statements 
  (Expressed in U.S. dollars)

|11. | Commitments and Contingencies
|--- | -----------------------------
|    |                              
|    | a)                           
|    |                              
|    | b)                           
|    |                              
|    | c)                           
|    |                              
|    | d)                           
|    |                              
|    | e)                           
|    |                              
|    | f)                           
|    |                              
|    | g)                           
|    |                              
|    | h)                           
|    |                              
|    | i)                           

F-16

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited) 
  (An Exploration Stage Company) 
  Notes to the Financial Statements 
  (Expressed in U.S. dollars)

|11. | Commitments and Contingencies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|12. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Potential benefits of income tax losses are
        not recognized in the accounts until realization is more likely than not.
        The Company has net operating losses of $6,893,000, which commence expiring
        in 2021. Pursuant to SFAS No. 109 the Company is required to compute tax
        asset benefits for net operating losses carried forward. The potential
        benefit of net operating losses has not been recognized in these financial
        statements because the Company cannot be assured it is more likely than
        not it will utilize the net operating losses carried forward in future
        years. For the years ended June 2006 and 2005, the valuation allowance
        established against the deferred tax assets increased by $1,411,000 and
        $427,000, respectively.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The components of the net deferred tax asset
        at June 30, 2006 and 2005 and the statutory tax rate, the effective tax
        rate and the elected amount of the valuation allowance are scheduled below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

2006
      2005$
      $Cumulative Net Operating Loss
      6,893,000
      2,862,000Statutory Tax Rate
      35%
      35%Effective Tax Rate
      
      Deferred Tax Asset
      2,413,000
      1,002,000Valuation Allowance
      (2,413,000)
      (1,002,000)Net Deferred Tax
        Asset
      
      


|13. | Subsequent Events
|--- | -----------------
|    |                  
|    | a)               
|    |                  
|    | b)               
|    |                  
|    | c)               

F-17

---

ITEM
8.                
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.

None.

ITEM
8A.              CONTROLS
AND PROCEDURES.

Under the supervision and with the participation of our
management, including the Chief Executive Officer and Chief Financial Officer,
we have evaluated the effectiveness of our disclosure controls and procedures as
required by Exchange Act Rule 13a-15(b) as of the end of the period covered by
this report. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer has concluded that these disclosure controls and procedures
are effective.

There were no changes in our internal control over financial
reporting during the year ended June 30, 2006 that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.

ITEM
8B.              OTHER
INFORMATION.

None.

35

---

PART III

ITEM
9.                
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT.

Our executive officers and directors and their respective ages
and titles as of October 12, 2006 are as follows:

NAME AND ADDRESS OF DIRECTOR / OFFICER
      AGE
      POSITIONBenjamin Ainsworth #408  1199 West Pender Street
      Vancouver British Columbia, Canada V6E 2R1
    65
    Director And SecretaryKurt Bordian #408  1199 West Pender Street Vancouver
      British Columbia, Canada V6E 2R1
    38
    Chief Financial OfficerJohn Carlesso Suite 815  65 Queen St. W. Toronto,
      Ontario Canada M4S 2E5
    42
    DirectorMilton Datsopoulos Suite 201  201 West Main Street
      Missoula, MT 59802
    66
    DirectorAnthony Harvey Ste. 408  1199 West Pender Street
      Vancouver, British Columbia, Canada V6E 2R1
    72
    Director, Chairman and Chief Executive OfficerCameron Reynolds 49 A/B Hanovergate Mansions Park Rd.
      London, United Kingdom NW1 4SN
    35
    DirectorBryan Wilson 84 Cedarcrest Crescent Richmond Hill,
      Ontario, Canada L4S 2P4
    56
    Director, President and TreasurerMark A. Reynolds #408  1199 West Pender Street
      Vancouver British Columbia, Canada V6E 2R1
    44
    Director and Vice President Finance


Set forth below is a brief description of the background and
business experience of our executive officers and directors for the past five
years:

Benjamin Ainsworth(Director and Secretary): On May 30,
2006, Mr. Benjamin Ainsworth was appointed as our director. On May 30, 2006, Mr.
Benjamin Ainsworth was appointed as our Secretary. Mr. Ainsworth is a senior
geologist and mining consultant who has been involved in the mining industry for
over thirty-five years.

Mr. Ainsworth joined Place Development in 1965 and held
positions of Senior Geologist, Chief Geochemist, Exploration Manager  Easter
Canada, Exploration Manager  Chile, and President  Place Chile, South America.
Throughout the 1970s, Mr. Ainsworth was involved in the design, budgeting and
implementation of exploration programs that included large and small drill
programs, geophysical surveys, geological mapping, geochemical surveys, and a
full range of project evaluation studies. He is a registered Professional
Engineer in the Province of British Columbia, Canada, and is a Canadian citizen
by naturalization. Mr. Ainsworth is also senior geologist and mining consultant
and principal of Ainsworth Jenkins Holdings Inc. and director of several
reporting companies including ESO Uranium, BHR Buffalo Head Resources Ltd.,
Columbia Yukon Explorations Inc., Consolidated Venturex Holdings Ltd., Hathor
Exploration Ltd., and Sultan Minerals Inc.

Kurt Bordian (Chief Financial Officer): On January 6,
2006, Mr. Kurt Bordian was appointed as our Chief Financial Officer. Mr. Bordian
is responsible for our financial management functions. He has worked primarily
in the mineral exploration and oil and gas industries over the past 10 years,
and has held the position of controller with three public companies exploring
and operating in the Solomon Islands, Ghana, Tunisia and

36

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Western Canada. Mr. Bordian is also active with other public
entities as operations manager and corporate secretary.

From 1996 to 2000, Mr. Bordian held the position of controller
for Leigh Resource Corp. located in Vancouver, British Columbia. From July 2000
to August 2001, Mr. Bordian was a controller for Insurance Replacement Centre of
Vancouver, British Columbia. From September 2001 to October 2003, Mr. Bordian
worked as a self-employed accountant. Since November 2003, Mr. Bordian has been
a controller for Bishop Gold Inc. located in Vancouver, British Columbia. Since
November 2004, Mr. Bordian has been a director for Legal Access Technologies
Inc. located in Las Vegas, Nevada. From November 2004 to April 2005, Mr. Bordian
was the Chief Financial Officer for Legal Access Technologies Inc. Since July
2005, Mr. Bordian has been the corporate secretary for Calypso Acquisition Corp.
located in Vancouver, British Columbia.

Mr. Bordian is a Certified General Accountant in Canada, and
holds a Bachelor of Commerce (Honors) Degree from the University of Manitoba.

John Carlesso (Director): On February 22, 2006, Mr. John
Carlesso was appointed as our director. Mr. Carlesso is a senior executive with
over 15 years of international business and financial markets experience.

Mr. Carlesso is currently president of Apogee Minerals Ltd.
(Apogee), a Canadian mining and exploration company developing advanced
Silver-Zinc projects in South America. Apogee is focused on projects that offer
significant exploration upside with the potential to be rapidly developed into
producing assets. Apogee currently has a focus in the historic silver producing
regions of Bolivia. Since September 2003, Mr. Carlesso has held the position of
vice president, Corporate Development with Desert Sun Mining Corp., a gold
mining and exploration company listed on the Toronto Stock Exchange and the
American Stock Exchange. From August 2000 to September 2003, Mr. Carlesso was in
Investor Relations and a director of Kasten Chase Applied Resources located in
Mississauga, Ontario. Kasten Chase Applied Resources is in the business of data
security. Previously, he provided capital markets, corporate finance, and
strategic marketing advice to growth-oriented companies, both public and
private, across a broad range of sectors. He has also held positions in the
Institutional and Private Client divisions at some of Canada's largest
investment dealers. Mr. Carlesso holds a Bachelor of Economics degree from the
University of Western Ontario.

Milton Datsopoulos (Director): Mr. Datsopoulos joined
our Board of Directors on July 1, 2004 and was appointed Chairman of the Board
on April 12, 2005. Mr. Datsopoulos is the founder of and partner in Datsopoulos,
MacDonald, and Lind, P.C., a multi-disciplinary law firm located in Missoula,
Montana which specializes in business, environmental, and transportation law
with a U.S. and international clientele. He has served on and continues to serve
as a Genutec board member and director of numerous business organizations
including public and private companies, including Montana Rail Link, Leigh
Resource Corporation - Vancouver, BC, Montana World Trade Center, Criticare
Systems and Healthrite Corporation.

Mr. Datsopoulos earned a bachelor's in Economics with high
honors and a law degree with honors, both from the University of Montana. Mr.
Datsopoulos and his partners have achieved the highest legal rating from the
most recognized national publication that rates attorneys based upon evaluations
by local attorneys and judges. He is a member of the State Bar of Montana,
American Bar Association, Montana Trial Lawyers Association, and the Association
of Trial Lawyers of America. Mr. Datsopoulos specializes in personal injury law,
criminal law, medical malpractice and general litigation practice.

Anthony Harvey(Director, Chairman, and Chief Executive
Officer): Mr. Anthony Harvey has over 40 years of consulting experience on
numerous mining projects internationally with capital costs ranging up to and
exceeding $400 million. Mr. Harvey has spent 30 years working with Wright
Engineers Ltd.  Fluor Daniels in various management positions, including Senior
Project Manager, involved in the design and construction of 14 mines world wide
on behalf of major mining corporations. Mr. Harvey is presently the founder and
board member of ARH Management Limited, a director of Terra Energy Inc.
(TTR-TSX), former founder, president and chairman of Azco Mining Inc. (TSX,
AMEX), former founder, chairman and director of Oremex Resources Inc. (ORM-
TSX), and former chairman and director of Lakeshore Gold Corp. (LSG-TSX). Mr.
Harvey has provided consulting services to Canyon Copper since April 2005
pursuant to a consulting agreement dated as of April 1, 2005.

Cameron Reynolds (Director): Mr. Reynolds was appointed
our Chief Financial Officer and a Director on May 6, 2004. Mr. Reynolds resigned
as Chief Financial Officer on January 6, 2006 continues to act as a

37

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member of the our board of directors. Mr. Reynolds has a very
strong mix of management experience and qualifications that will be a strong
asset for us.

For the past 10 years Mr. Reynolds has worked either as an
officer or director of five dynamic high-growth companies in both the mining and
biotech fields across three continents. Mr. Reynolds has had extensive
international experience specializing in the structuring, management and
strategic planning of successful startup companies. From June 1995 to October
2002, he was Vice President and a director of Reynorg Management Inc., a private
company that provided management and capital for early stage growth companies.
From April 1998 to October 2001, Mr. Reynolds was Corporate Secretary of Probio
International Inc., a private company engaged in the business of commercializing
intellectual property in the animal biotechnology fields. He is also currently a
director of Empress Ventures, a private company providing services for start-up
companies.

Mr. Reynolds holds both an MBA and an undergraduate commerce
degree from the University of Western Australia, as well as several other
industry qualifications

Bryan Wilson (Director, President and Treasurer):
Effective March 6, 2006, Bryan Wilson was appointed as a member of our Board of
Directors. Effective May 30, 2006, Mr. Wilson was also appointed as our
President and Treasurer.

Mr. Wilson has worked in the fields of mining exploration and
development for 18 years and financial services for 12 years. He has filled
various roles such as Project Geologist/Manager for Shell Canada; Consultant,
Financial Advisor for Scotia McLeod; Mining Analyst for C.M. Oliver; and
Corporate Finance Specialist for Dominick & Dominick and Thames Capital. He
is currently responsible for our executive management functions, including
regulatory filing and our day-to-day administrative operations. Within the
mining industry, Mr. Wilson has acquired broad international exposure to a
variety of mineral commodities and has worked throughout the world. In 1981,
Shell Canada's East Kemptville Tin Mine which was discovered and developed under
his supervision (50.0 million tonnes @ 0.23% Tin).

Mark A. Reynolds (Director, Vice President, Finance) Mr.
Reynolds has a Bachelor of Business Administration from Edith Cowan University
of Western Australia and over twenty years of experience in mining and finance.
Mr. Reynolds, previously a stock broker, concentrated on financing and
development of numerous mining and oil & gas companies. Mark has developed
and maintains strategic relationships with numerous contacts within the
international institutional and brokerage communities.

TERM OF OFFICE

Our directors are appointed for a one-year term to hold office
until the next annual general meeting of our stockholders or until removed from
office in accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.

COMMITTEES OF THE BOARD OF DIRECTORS

Audit Committee

Our audit committee currently consists of the following
directors: Anthony Harvey, Milton Datsopolous and John Carlesso. The audit
committee is responsible for:

|(1) | selection and oversight of our independent
    accountant;                                                                                              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | establishing procedures for the receipt, retention and
      treatment of complaints regarding accounting, internal controls and
      auditing matters;
|(3) | establishing procedures for the confidential, anonymous
      submission by our employees of concerns regarding accounting and auditing
      matters;  
|(4) | engaging outside advisors; and                                                                                                                          
|(5) | funding for the outside auditory and any outside advisors
      engagement by the audit committee.                                                      

Our board of directors has adopted an Audit Committee Charter
which provides appropriate guidance to Audit Committee members as to their
duties.

38

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Audit Committee Financial Expert

Our Board of Directors has determined that we do not presently
  have a director who meets the definition of an “audit committee financial
  expert.” We believe that the cost related to appointing a financial expert
  to our Board of Directors at this time is prohibitive.

Disclosure Committee and Charter

We have a disclosure committee and disclosure committee
charter. The disclosure committee is comprised of all of our officers and
directors. The purpose of the committee is to provide assistance to the Chief
Executive Officer and the Chief Financial Officer in fulfilling their
responsibilities regarding the identification and disclosure of material
information about us, and the accuracy, completeness and timeliness of our
financial reports.

CODE OF ETHICS

We adopted a Code of Ethics applicable to our Chief Executive
Officer, Chief Financial Officer, Corporate Controller and certain other finance
executives, which is a "code of ethics" as defined by applicable rules of the
SEC. Our Code of Ethics was attached as an exhibit to our Annual Report on Form
10-KSB for the year ended June 30, 2003, filed with the SEC on August 26, 2003.
If we make any amendments to our Code of Ethics other than technical,
administrative, or other non-substantive amendments, or grant any waivers,
including implicit waivers, from a provision of our Code of Ethics to our chief
executive officer, chief financial officer, or certain other finance executives,
we will disclose the nature of the amendment or waiver, its effective date and
to whom it applies in a Current Report on Form 8-K filed with the SEC.

39

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COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors, and persons who own more than 10% of a
registered class of our securities (Reporting Persons), to file reports of
ownership and changes in ownership with the SEC. Reporting Persons are required
by SEC regulations to furnish us with copies of all forms they file pursuant to
Section 16(a). Based solely on our review of such reports received by the
Company, and written representations from certain Reporting Persons that, other
than as described below, no other reports were required for those persons, we
believe that, during the year ended June 30, 2006, all Reporting Persons
complied with all Section 16(a) filing requirements applicable to them.

The following persons have failed to file, on a timely basis,
the identified reports required by Section 16(a) of the Securities Exchange Act
of 1934:

Name and Principal Position
      Number of Late Insider
      Reports
      Transactions Not Timely
      Reported
      Known Failures to File a
      Required FormBenjamin Ainsworth Director And Secretary
    One
    One
    NoneKurt Bordian Chief Financial Officer
    One
    One
    NoneJohn Carlesso Director
    One
    One
    OneMilton Datsopoulos Director
    One
    One
    NoneAnthony Harvey Director, Chairman and Chief
      Executive Officer
    One
    One
    NoneCameron Reynolds Director
    One
    One
    NoneBryan Wilson Director, President and Treasurer
    None
    None
    None


40

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ITEM
10.                EXECUTIVE
COMPENSATION.

Management Compensation

The following table summarizes the compensation awarded to,
earned by, or paid to our President and Chief Executive Officer and other
officers and directors who received annual compensation in excess of $100,000
(the Named Executive Officers) for each of our three most recently completed
fiscal years.

SUMMARY COMPENSATION TABLE(1)ANNUAL COMPENSATION
      LONG TERM COMPENSATIONName
      Title
      Year
      Salary
      Bonus
      Other 
        Annual 
        Compen- 
        sation
      Awards
      Payouts
      All Other 
        Compen- 
        sationRestricted 
        Stock 
        Awarded
      Options/
        SARs*(1)
        (#)
      LTIP 
        payout
        ($)Anthony Harvey(3)
      CEO, Chairman & 
        Director
      2006 
        2005 
        2004
      $0 
        $0 
        N/A
      $0  $0 
        N/A
      $0 
        $0 
        N/A
      0 
        0 
        N/A
      0 
        500,000 
        N/A
      $0 
        $0 
        N/A
      $0 
        $0 
        N/ABryan Wilson (3)
      President, 
        Treasurer & 
        Director
      2006 
        2005 
        2004
      $10,130 
        N/A 
        N/A
      $0  N/A 
        N/A
      $0 
        N/A 
        N/A
      0 
        N/A 
        N/A
      500,000 
        N/A 
        N/A
      $0 
        N/A 
        N/A
      $0 
        N/A 
        N/AKurt Bordian(2)
      CFO
      2006 
        2005 
        2004
      $26,215 
        N/A 
        N/A
      $0  N/A 
        N/A
      $0 
        N/A 
        N/A
      0 
        N/A 
        N/A
      500,000 
        N/A 
        N/A
      $0 
        N/A 
        N/A
      $0 
        N/A 
        N/AMark Reynolds(4)
      VP, Finance & 
        Director
      2006 
        2005 
        2004
      $60,000 
        N/A 
        N/A
      0  N/A 
        N/A
      0 
        N/A 
        N/A
      0 
        N/A 
        N/A
      1,200,000 
        N/A 
        N/A
      0 
        N/A 
        N/A
      0 
        N/A 
        N/ACameron Reynolds
      Director  & Former CFO
      2006 
        2005 
        2004
      $0 
        $0 
        $0
      $0  $0 
        $0
      $41,939 
        $12,350 
        $0
      0 
        0 
        0
      500,000 
        700,000 
        0
      $0 
        $0 
        $0
      $0 
        $0 
        $0Benjamin Ainsworth (3)
      Secretary & 
        Director
      2006 
        2005 
        2004
      $0 
        N/A 
        N/A
      $0  N/A 
        N/A
      $0 
        N/A 
        N/A
      0 
        N/A 
        N/A
      0 
        N/A 
        N/A
      $0 
        N/A 
        N/A
      $0 
        N/A 
        N/ABrent Jardine (3)
      Former Director, 
        Former President  & Former CEO
      2006 
        2005 
        2004
      $117,700 
        $0 
        $0
      $0  $0 
        $0
      $0 
        $15,525 
        $0
      0 
        0 
        0
      500,000 
        500,000 
        0
      $0 
        $0 
        $0
      $0 
        $0 
        $0Robert F. Weicker (3)
      Former VP & 
        Former Director
      2006 
        2005 
        2004
      $0 
        $0 
        $0
      $0  $0 
        $0
      $0 
        $0 
        $250,000
      0 
        0 
        0
      400,000 
        500,000 
        0
      $0 
        $0 
        $0
      $0 
        $0 
        $0Hugh Grenfal, Jr.
      Former President,
        Former CEO, 
        Former Treasurer, 
        Former CFO & 
        Former Director
      2006 
        2005 
        2004
      N/A 
        N/A 
        $0
      N/A  N/A 
        $0
      N/A 
        N/A 
        $0
      N/A 
        N/A 
        0
      N/A 
        N/A 
        0
      N/A 
        N/A 
        $0
      N/A 
        N/A 
        $0


|(1) | See Compensation Of Directors below for information
      regarding stock options granted to our named executive officers.                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Mr. Bordian became Chief Financial Officer on January 6,
      2006.                                                                                                                                                                                                                                                          
|(3) | On May 30, 2006 Brent Jardine, Robert Weicker and Timothy
      Hipsher resigned from our board of directors. Effective May 30, 2006, we
      made the following board and officer appointments: (i) Anthony Harvey and
      Benjamin Ainsworth were appointed to our board of directors to fill the
      vacancies created

41

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|    | following the resignations of Mr. Jardine, Mr. Weicker
      and Mr. Hipsher from the board; (ii) Mr. Harvey was appointed as our
      Chairman and Chief Executive Officer; (iii) Mr. Ainsworth was appointed as
      our Secretary; and (iv) Bryan Wilson, presently a member of our board of
      directors, was appointed as our President and Treasurer.                                                                                           
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | On October 2, 2006, Mark A. Reynolds was appointed as a
      member of the Board of Directors of the Company. On October 6, 2006 Mr.
      Reynolds was subsequently appointed as our Vice President of Finance. Mr.
      Reynolds currently receives consulting fees of $10,000 per month under a
      consulting agreement dated January 19, 2006. Mr. Reynolds will continue to
      receive the consulting fees as our Vice President of
  Finance.

Compensation of Directors

We do not regularly compensate our directors for their time
spent on behalf of Canyon, but they are entitled to receive reimbursement for
all out of pocket expenses incurred for attendance at our Board of Directors
meetings. The following options to purchase our common shares were granted to
our directors in fiscal 2006. All of the options were vested on the date of
grant and are exercisable immediately:

OPTION/SAR GRANTS IN LAST FISCAL
        YEARName
      Number of Securities Underlying Options Granted
      % of Total Options Granted To Employees
      Exercise Price
        (per Share)
      Market Price on Date
        of Grant
      Expiration DateBryan Wilson, 
        President and Treasurer
      500,000
      5.8%
      $0.50
      $0.59
      April 5, 2008Kurt Bordian, 
        Chief Financial Officer
      500,000
      5.8%
      $0.50
      $0.59
      April 5, 2008John Carlesso, Director
      1,000,000
      11.7%
      $0.50
      $0.59
      April 5, 2008Milton Datsopoulos 
        Director and Former 
        Chairman
      500,000
      5.8%
      $0.50
      $0.59
      April 5, 2011Brent Jardine, 
        Former Director, 
        President and Chief 
        Executive Officer
      500,000
      5.8%
      $0.50
      $0.59
      April 5, 2011Cameron Reynolds, 
        Director
      500,000
      5.8%
      $0.50
      $0.59
      April 5, 2011Mark A. Reynolds
      1,200,000
      14%
      $0.50
      $0.59
      April 5, 2011Timothy Hipsher 
        Former Director
      500,000
      5.8%
      $0.50
      $0.59
      April 5, 2011Robert F. Weicker 
        Former Director 
        President & CEO
      400,000
      4.7%
      $0.50
      $0.74
      April 25, 2011


42

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Aggregated Option/SAR Exercises in Last Fiscal Year and
Financial Year-End Option/SAR Value

AGGREGATED OPTION/SAR EXERCISES DURING THE
        LAST FISCAL YEAR FISCAL YEAR-END OPTION/SAR VALUESName
      Common Shares
      Acquired on Exercise ($)
      Value Realized
      ($)
      Unexercised Options at
      Financial Year-End (#) exercisable /
      unexercisable
      Value of Unexercised In-
      The-Money Options/SARs at Financial Year-End ($)
      exercisable / unexercisableAnthony Harvey Director, Chairman and
      Chief Executive Officer
    Nil
    N/A
    500,000 / 0
    $50,000/N/A(1)Kurt Bordian, Chief Financial Officer
    Nil
    N/A
    500,000 / 0
    NIL/N/A(1)Mark A. Reynolds Director, Vice President
      Finance
    Nil
    N/A
    1,200,000/0
    Nil/N/A(1)Cameron Reynolds Director
    Nil
    N/A
    1,200,000 / 0
    $70,000/N/A(1)Robert Weicker, Former Director,
      President and CEO
    Nil
    N/A
    400,000/0
    NIL/N/ABryan Wilson, President and Treasurer
    Nil
    N/A
    500,000 / 0
    NIL/N/A(1)Milton Datsopolous, Director
    Nil
    N/A
    1,000,000/0
    $50,000/N/A


|(1) | The values for in-the-money options are calculated by
      determining the difference between the fair market value of the securities
      underlying the options as of June 30, 2006 ($0.40 per share on OTC
      Bulletin Board) and the exercise price of the individuals
  options.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

EQUITY COMPENSATION PLAN INFORMATION

Our 2004 Non-qualified Stock Option Plan (the 2004 Plan) is
intended to provide incentives to our employees, directors and consultants by
providing them with opportunities to purchase shares of our common stock. The
2004 Plan is effective as of June 17, 2004 and all stock options granted under
the 2004 Plan must be granted within ten years from the date the 2004 Plan was
adopted. We originally registered the 2004 Plan on June 17, 2004 pursuant to a
registration statement on Form S-8. Effective April 6, 2005, we amended the 2004
Plan and increased the total of common shares reserved for issuance under the
2004 Plan from one million to a total of four million common shares.

Our Board of Directors is authorized to administer the 2004
Plan. In doing so, our Board of Directors may: (i) designate optionees; (ii)
determine the terms and provisions of respective option agreements (which need
not be identical) including, but not limited to, the number of shares to be
covered by each option, provisions concerning the time or times when and the
extent to which the options may be exercised, and the nature and duration of
restrictions as to transferability or restrictions constituting substantial risk
of forfeiture; (iii) accelerate the right of an optionee to exercise, in whole
or in part, any previously granted option; (iv) interpret the provisions and
supervise the administration of the 2004 Plan; (v) determine the fair market
value of shares issuable under the 2004 Plan; (vi) designate the type of options
to be granted to an optionee; and (vii) determine any other matter which is
necessary or desirable for, or incidental to, the administration of the 2004
Plan. On April 5, 2006, our Board of Directors approved the 2006 Stock Incentive
Plan (the "2006 Plan"). The 2006 Plan became effective on April 5, 2006. The
2006 Plan provides that the option price be the fair market value of the stock
at the date of grant as determined by our Board of Directors. Options granted
become exercisable and expire as determined by our Board of Directors, see 2006
Stock Incentive Plan, below.

43

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The following table sets forth certain information concerning
all equity compensation plans previously approved by stockholders and all
previous equity compensation plans not previously approved by stockholders, as
of the most recently completed fiscal year.

EQUITY COMPENSATION PLAN INFORMATION AS AT
        JUNE 30, 2006Plan Category
      Number of securities to
      be issued upon exercise of outstanding options,
      warrants and rights (a)
      Weighted-average
      exercise price of outstanding options,
      warrants and rights (b)
      Number of securities
      remaining available for issuance under equity
      compensation plans (excluding securities
      reflected in column (a)) (c)Equity Compensation Plans approved by security
      holders
    10,000,000
    $0.50 per share
    1,450,000Equity Compensation Plans not approved by security
      holders
    3,000,000
    $0.30 per share
    500,000Total
    13,000,000
    $0.30 per share
    1,950,000


2006 Stock Incentive Plan

On April 5, 2006, we established our 2006 Stock Incentive Plan
(the 2006 Plan). The purpose of the 2006 Plan is to enhance the long-term
stockholder value of the Company by offering opportunities to our directors,
officers, employees and eligible consultants and any entity that directly or
indirectly is in control of or is controlled by the Company (a Related
Company) to acquire and maintain stock ownership in the Company in order to
give these persons the opportunity to participate in our growth and success, and
to encourage them to remain in our service or a Related Company.

The 2006 Plan is administered by our Board of Directors or by a
committee of two or more non-employee directors appointed by our Board of
Directors (the "Plan Administrator"). Subject to the provisions of the 2006
Plan, the Plan Administrator has full and final authority to grant the awards of
stock options and to determine the terms and conditions of the awards and the
number of shares to be issued pursuant thereto. Options granted under the 2006
Plan may be either "incentive stock options," which qualify for special tax
treatment under the Internal Revenue Code of 1986, as amended, (the "Code"),
nonqualified stock options or restricted shares.

All of our employees and members of our Board of Directors are
eligible to be granted options. Individuals who have rendered or are expected to
render advisory or consulting services to us are also eligible to receive
options. The maximum number of shares of our Common Stock with respect to which
options or rights may be granted under the 2006 Plan to any participant is
10,000,000 shares with the number of authorized shares under the 2006 Plan
increasing on the first day of each quarter beginning with the fiscal quarter
commencing April 1, 2006 by the lesser of the following amounts: (1) 15% of the
total increase in the number of shares of Common Stock outstanding during the
previous fiscal quarter; or (2) a lesser number of shares of Common Stock as may
be determined by the Board, subject to certain adjustments to prevent
dilution.

The exact terms of the option granted are contained in an
option agreement between us and the person to whom such option is granted.
Eligible employees are not required to pay anything to receive options. The
exercise price for incentive stock options must be no less than 75% of the fair
market value of the Common Stock on the date of grant. The exercise price for
nonqualified stock options is determined by the Plan Administrator in its sole
and complete discretion. An option holder may exercise options from time to
time,

44

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subject to vesting. Options will vest immediately upon death or
disability of a participant and upon certain change of control events.

The Plan Administrator may amend the 2006 Plan at any time and
in any manner, subject to the following: (1) no recipient of any award may,
without his or her consent, be deprived thereof or of any of his or her rights
thereunder or with respect thereto as a result of such amendment or termination;
and (2) any outstanding incentive stock option that is modified, extended,
renewed, or otherwise altered must be treated in accordance with Section 424(h)
of the Code.

The 2006 Plan terminates on April 5, 2016 unless sooner
terminated by action of our Board of Directors. All awards granted under the
2006 Plan expire ten years from the date of grant, or such shorter period as is
determined by the Plan Administrator. No option is exercisable by any person
after such expiration. If an award expires, terminates or is canceled, the
shares of our Common Stock not purchased thereunder may again be available for
issuance under the 2006 Plan.

We have not yet filed a registration statement under the
Securities Act of 1933 to register the shares of our Common Stock reserved for
issuance under the 2006 Plan.

None of the following persons has any substantial or material
interest, directly or indirectly, by way of beneficial ownership of securities
or otherwise, in any matter to be acted on at the special meeting except for our
current and future directors and executive officers inasmuch as they may be
granted stock options or stock awards pursuant to our 2006 Plan:

|1. | each person who has been one of our directors or
      executive officers at any time since the beginning of our last fiscal
      year;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                         
|2. | each nominee for election as one of our directors;
    or                                                                               
|   |                                                                                                                                         
|3. | any affiliate or associate of any of the foregoing
      persons.                                                                       

CHANGE IN CONTROL ARRANGEMENTS

None.

ITEM
11.               SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of October 3,
2006 by: (i) each of our directors and nominees, (ii) each of our named
executive officers, and (iii) officers and directors as a group. Other than as
described below, no person or group is known by us to beneficially own more than
5% of our outstanding shares of common stock. Unless otherwise indicated, the
stockholders listed possess sole voting and investment power with respect to the
shares shown.

Title of Class
      Name and Address
      of Beneficial Owner
      Amount and Nature of
      Beneficial Ownership(1)
      Percentage of Common
      Stock(1)Directors and OfficersCommon Stock
    Benjamin Ainsworth Director
      And Secretary #408  1199 West Pender Street Vancouver British
      Columbia, Canada V6E 2R1
    -Nil-
    *Common Stock
    Kurt Bordian Chief Financial
      Officer #408  1199 West Pender Street Vancouver British Columbia,
      Canada V6E 2R1
    540,000 shares 
        Direct(1)(2)
    *


45

---

Title of Class
      Name and Address
      of Beneficial Owner
      Amount and Nature of
      Beneficial Ownership(1)
      Percentage of Common
      Stock(1)Common Stock
    John Carlesso Director
      Suite 815  65 Queen St. W. Toronto, Ontario Canada M4S 2E5
    2,000,000 shares Direct 1)(3)
    3%Common Stock
    Milton Datsopoulos Director
      Suite 201  201 West Main Street Missoula, MT 59802
    1,000,000 shares Direct 1)(4)
    1.5%Common Stock
    Anthony Harvey Director,
      Chairman and Chief Executive Officer Ste. 408  1199 West Pender
      Street Vancouver, British Columbia, Canada V6E 2R1
    4,660,000 shares Direct 1)(7)
    7.1%Common Stock
    Cameron Reynolds Director
      49 A/B Hanovergate Mansions Park Rd. London, United Kingdom NW1
      4SN
    1,392,633 shares1)(4)Direct
    2.1%Common Stock
    Mark A. Reynolds Director,
      Vice President Finance Ste. 408  1199 West Pender Street
      Vancouver, British Columbia, Canada V6E 2R1
    11,199,998 shares Direct 1)(2)
    17%Common Stock
    Bryan Wilson Director,
      President and Treasurer 84 Cedarcrest Crescent Richmond Hill,
      Ontario, Canada L4S 2P4
    500,000 shares1)(4)Direct
    *Common Stock
    All Officers and Directors as a
      Group (8 persons)
    21,292,631 shares Direct
    30.4%5% StockholdersCommon Stock
    Anthony Harvey Ste. 408 
      1199 West Pender Street Vancouver, British Columbia, Canada V6E
      2R1
    4,660,000 shares Direct 1)(7)
    7.1%Common Stock
    Clarion Finanz AG Gerbergasse
      5 Zurich, Switzerland CH 8023
    3,700,000 shares Direct
    5.6%Common Stock
    Mark A. Reynolds Director,
      Vice President Finance Ste. 408  1199 West Pender Street
      Vancouver, British Columbia, Canada V6E 2R1
    11,199,998 shares Direct 1)(2)
    17%


|*   | Less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Applicable percentage of ownership is based on 65,720,596
      shares of Common Stock outstanding as of October 3, 2006 together with
      securities exercisable or convertible into shares of Common Stock within
      60 days of October 3, 2006 for each stockholder. Beneficial ownership is
      determined in accordance with the rules of the SEC and generally includes
      voting or investment power with respect to securities. Shares of Common
      Stock subject to securities exercisable or convertible into shares of
      Common Stock that are currently exercisable or exercisable within 60 days
      of October 3, 2006 are deemed to be beneficially owned by the person
      holding such options for the purpose of computing the percentage of
      ownership of such person, but are not treated as outstanding for the
      purpose of computing the percentage ownership of any other person.
|(2) | The number of shares listed as beneficially owned by Mr.
      Bordian consists of (i) 20,000 shares of common stock owned directly by
      Mr. Bordian, (ii) warrants to purchase 20,000 shares of common stock
      exercisable at $0.50                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

46

---

|    | per share, with each warrant entitling Mr. Bordian to
      purchase one additional share for a period of two years until February 28,
      2008, (iii) options to purchase 500,000 shares of Common Stock exercisable
      at $0.50 per share until April 5, 2008.                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The number of shares listed as beneficially owned by Mr.
      Carlesso consists of 1,000,000 shares of common stock held directly by Mr.
      Carlesso and options to purchase 1,000,000 shares of Common Stock
      exercisable at $0.50 per share until April 5, 2008.                                                                                                                                                                                                                                                                                                     
|(4) | The number of shares listed as beneficially owned by Mr.
      Datsopoulos consists of: (i) options to purchase 500,000 shares of Common
      Stock exercisable at $0.30 per share until April 8, 2010; and (ii) options
      to purchase 500,000 shares of Common Stock exercisable at $0.50 per share
      until April 5, 2011.                                                                                                                                                                                                                                            
|(5) | The number of shares listed as beneficially owned by Mr.
      Reynolds consists of: (i) 192,633 shares of Common Stock held directly by
      Mr. Reynolds, (ii) options to purchase 700,000 shares of Common Stock
      exercisable at $0.30 per share until April 8, 2010; and (ii) options to
      purchase 500,000 shares of Common Stock exercisable at $0.50 per share
      until April 5, 2011.                                                                                                                                                                      
|(6) | The number of shares listed as beneficially owned by Mr.
      Wilson consists of options to purchase 500,000 shares of Common Stock
      exercisable at $0.50 per share until April 5, 2008.                                                                                                                                                                                                                                                                                                                                                                                  
|(7) | The number of shares listed as beneficially owned by Mr.
      Harvey consists of: (i) 4,160,000 shares of Common Stock owned directly by
      Mr. Harvey, and (ii) options to purchase 500,000 shares of Common Stock
      exercisable at $0.30 per share owned directly by Mr. Harvey.                                                                                                                                                                                                                                                                                      
|(8) | The number of shares listed as beneficially owned by Mr.
      Reynolds consists of: (i) 9,999,998 shares of Common Stock held directly
      by Mr. Reynolds, (ii) options to purchase 1,200,000 shares of common stock
      within 60 days of the date of this prospectus. .Under a Share Transfer
      Agreement dated October 3, 2006, Mark A. Reynolds acquired a total of
      9,999,998 shares of our common stock representing approximately 15.2% of
      our current issued and outstanding shares of common stock from our former
      president, Brent Jardine.

ITEM
12.              CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS.

None of the following parties has during the past two fiscal
years had any material interest, direct or indirect, in any transaction with us
or in any presently proposed transaction that has or will materially affect us,
other than as noted in this section:

| | (i)   | Any of our directors or officers;                                                                                                                                          
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Any person proposed as a nominee for election as a
      director;                                                                                                         
| | (iii) | Any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our
      outstanding shares of common stock;
| | (iv)  | Any of our promoters; and                                                                                                                                                  
| | (v)   | Any member of the immediate family (including spouse,
      parents, children, siblings and in-laws) of any of the foregoing
      persons.                                

Mr. Mark Reynolds currently receives consulting fees of $10,000
per month under a consulting agreement dated January 19, 2006. Mr. Reynolds will
continue to receive the consulting fees as our Vice President of Finance.

As at June 30, 2006, we were indebted to the former Chief
Financial Officer of the Company for $4,970 (June 30, 2005 - $19,793). The
amount due is non-interest bearing, unsecured and due on demand. As at June 30,
2006, we were indebted to the former Vice President of the Company for $2,293
(June 30, 2005  nil). The amount due is non-interest bearing, unsecured and due
on demand.

During the year ended June 30, 2006, we paid consulting fees of
$26,215 (2005 - $41,939) to the Chief Financial Officer, consulting fees of
$23,617 (2005 - $nil) to our former Vice President, $10,102 (2005 - $14,481) to
a director of Canyon and management fees of $117,700 (2005 - $15,525) to our
former president Mr. Jardine.

As at June 30, 2006, we were indebted to our former President
Mr. Jardine and a company controlled by Mr. Jardine in the amount of $1,828
(June 30, 2005 - $13,457). This amount is non-interest bearing, unsecured and
due on demand. During the year ended June 30, 2006, this company was paid
$20,122 for rent (2005 - $Nil) and $41,403 (2005 - $30,073) for general and
administrative costs

47

---

ITEM
13.              EXHIBITS.

|Exhibit |                                                                                                                                                                           
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                    
|        |                                                                                                                                                                           
|3.1     | Amended
        and Restated Articles of Incorporation.                                                                                                                   
|        |                                                                                                                                                                           
|3.2     | Bylaws.(1)                                                                                                                                                                
|        |                                                                                                                                                                           
|4.1     | Specimen
        Stock Certificate.                                                                                                                                       
|        |                                                                                                                                                                           
|10.1    | 2004 Nonqualified
        Stock Option Plan.(7)                                                                                                                           
|        |                                                                                                                                                                           
|10.2    | 2006 Stock Incentive
        Plan dated April 5, 2006.(15)                                                                                                                
|        |                                                                                                                                                                           
|10.3    | Convertible
        Preferred Stock Purchase Agreement dated July 29, 2004 between Aberdene
        Mines Limited and Langley Park Investments PLC.(8)                    
|        |                                                                                                                                                                           
|10.4    | Debenture Purchase
        Agreement dated March 9, 2004 between Aberdene Mines Limited and Astra
        Star Limited.(9)                                                
|        |                                                                                                                                                                           
|10.5    | Convertible,
        Callable, Subordinated Debenture dated March 9, 2004 between Aberdene
        Mines Limited and Astra Start Limited. (9)                             
|        |                                                                                                                                                                           
|10.6    | Debenture Purchase
        Agreement dated March 15, 2004 between Aberdene Mines Limited and Norad
        Limited. (9)                                                   
|        |                                                                                                                                                                           
|10.7    | Convertible,
        Callable, Subordinated Debenture dated March 15, 2004 between Aberdene
        Mines Limited and Norad Limited. (9)                                  
|        |                                                                                                                                                                           
|10.8    | Debenture Purchase
        Agreement dated May 15, 2004 between Aberdene Mines Limited and Norad
        Limited.(10)                                                     
|        |                                                                                                                                                                           
|10.9    | Convertible,
        Callable, Subordinated Debenture dated May 15, 2004 between Aberdene Mines
        Limited and Norad Limited.(10)                                    
|        |                                                                                                                                                                           
|10.10   | Debenture Purchase
        Agreement dated September 22, 2004 between Aberdene Mines Limited and
        Norad Limited.(11)                                               
|        |                                                                                                                                                                           
|10.11   | Convertible,
        Callable, Subordinated Debenture dated September 22, 2004 between Aberdene
        Mines Limited and Norad Limited.(11)                              
|        |                                                                                                                                                                           
|10.12   | Debenture Purchase
        Agreement dated November 19, 2004 between Aberdene Mines Limited and Glenkirk
        International.(11)                                       
|        |                                                                                                                                                                           
|10.13   | Convertible,
        Callable, Subordinated Debenture dated November 19, 2004 between Aberdene
        Mines Limited and Glenkirk International.(11)                      
|        |                                                                                                                                                                           
|10.14   | Debenture Purchase
        Agreement dated February 10, 2005, effective December 14, 2004 between
        Aberdene Mines Limited and Riannon Limited.(12)                 
|        |                                                                                                                                                                           
|10.15   | Convertible,
        Callable, Subordinated Debenture dated February 10, 2005, effective December
        14, 2004 between Aberdene Mines Limited and Riannon Limited.(12)
|        |                                                                                                                                                                           
|10.16   | Debenture Purchase
        Agreement dated February 10, 2005 between Aberdene Mines Limited and Riannon
        Limited.(12)                                              
|        |                                                                                                                                                                           
|10.17   | Convertible,
        Callable, Subordinated Debenture dated February 10, 2005 between Aberdene
        Mines Limited and Riannon Limited.(12)                             

48

---

|Exhibit |                                                                                                                                                                                               
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                                        
|        |                                                                                                                                                                                               
|10.18   | Debenture Purchase Agreement dated March 15, 2005 between
      Aberdene Mines Limited and Riannon Limited.(12)                                                                               
|        |                                                                                                                                                                                               
|10.19   | Convertible, Callable, Subordinated Debenture dated March
      15, 2005 between Aberdene Mines Limited and Riannon
      Limited.(12)                                                        
|        |                                                                                                                                                                                               
|10.20   | Property Option Agreement dated March 18, 2004 between
      Aberdene Mines Limited, Robert & Sharon Weicker, Kurt & Tami
      Schendel, and Nevada Sunrise LLC (New York Canyon Project).(4)
|        |                                                                                                                                                                                               
|10.21   | Property Option Agreement dated April 8, 2004 between
      Aberdene Mines Limited and Consolidated Global Minerals Ltd. (Tuscarora
      Gold Project).(8)                                   
|        |                                                                                                                                                                                               
|10.22   | Letter of Intent dated February 18, 2004 between Aberdene
      Mines Limited and MMTC Development Corp. (Tuscarora Gold
      Project).(4)                                                   
|        |                                                                                                                                                                                               
|10.23   | Property Option Agreement dated April 15, 2004 between
      Aberdene Mines Limited and Consolidated Global Minerals Ltd. (Cornucopia
      Project).(9)                                      
|        |                                                                                                                                                                                               
|10.24   | Letter of Intent dated April 16, 2004 between Aberdene
      Mines Limited and Consolidated Global Minerals Ltd. (Slide Mine and
      Horsefal projects). (9)                                
|        |                                                                                                                                                                                               
|10.25   | Publicity Agreement dated February 23, 2004 between
      Aberdene Mines Limited and Capital Financial Media, Inc. (9)                                                                        
|        |                                                                                                                                                                                               
|10.26   | Lease Agreement dated July 21, 2004 between Aberdene
      Mines Limited and Jaycor Mining, Inc. (9)                                                                                          
|        |                                                                                                                                                                                               
|10.27   | Consulting Agreement dated June 1, 2004 between Aberdene
      Mines Limited and Kirin Venture Capital Corp. (9)                                                                              
|        |                                                                                                                                                                                               
|10.28   | Management Agreement dated January 1, 2005 between
      Aberdene Mines Limited and Brent Jardine. (13)                                                                                       
|        |                                                                                                                                                                                               
|10.29   | Amending Agreement dated October 26, 2005 between the
      Aberdene Mines Limited and Brent Jardine. (13)                                                                                    
|        |                                                                                                                                                                                               
|10.30   | Consulting Agreement dated April 5, 2005 between Aberdene
      Mines Limited and Anthony (Tony) R. Harvey.(12)                                                                               
|        |                                                                                                                                                                                               
|10.31   | Consulting Agreement dated August 5, 2005 between
      Aberdene Mines Limited and Chris Broili. (13)                                                                                         
|        |                                                                                                                                                                                               
|10.32   | Consulting Agreement dated August 10, 2005 between
      Aberdene Mines Limited and Mel Klohn. (13)                                                                                           
|        |                                                                                                                                                                                               
|10.33   | Consulting Agreement dated August 22, 2005 between
      Aberdene Mines Limited and Carlo Civelli. (13)                                                                                       
|        |                                                                                                                                                                                               
|10.34   | Consulting Agreement dated September 20, 2005 between
      Aberdene Mines Limited and Richard Dixon. (13)                                                                                    
|        |                                                                                                                                                                                               
|10.35   | Consulting Agreement dated September 20, 2005 between
      Aberdene Mines Limited and Richard Kehmeier. (13)                                                                                 
|        |                                                                                                                                                                                               
|10.36   | Consulting Agreement dated January 6, 2006 between
      Aberdene Mines Limited and Kurt Bordian.(14)                                                                                         

49

---

|Exhibit |                                                                                                                                                                       
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                
|        |                                                                                                                                                                       
|10.37   | Consulting Agreement
        dated January 19, 2006 between Aberdene Mines Limited and Mark A. Reynolds.(13)                                                          
|        |                                                                                                                                                                       
|10.38   | Consulting Agreement
        dated February 1, 2006 between Aberdene Mines Limited and Linda Erdman.(13)                                                              
|        |                                                                                                                                                                       
|10.39   | Consulting Agreement
        dated February 1, 2006 between Aberdene Mines Limited and Geoffrey Goodall.(13)                                                          
|        |                                                                                                                                                                       
|10.40   | Consulting Agreement
        dated February 1, 2006 between Aberdene Mines Limited and Robert Young(13)                                                               
|        |                                                                                                                                                                       
|10.41   | Consulting Agreement
        dated June 1, 2004 between Aberdene Mines Limited and Kirin Venture Capital
        Corp. (13)                                           
|        |                                                                                                                                                                       
|10.42   | Debt Settlement
        Agreement dated April 8, 2005 between Aberdene Mines Limited and Cameron
        Reynolds. (13)                                               
|        |                                                                                                                                                                       
|10.43   | Debt Settlement
        Agreement dated November 8, 2005 between Aberdene Mines Limited and Cameron
        Reynolds. (13)                                            
|        |                                                                                                                                                                       
|10.44   | Mineral Processing
        Research Agreement dated March 22, 2006 among Aberdene Mines Limited,
        Nevada Sunrise, LLC and INTOR Resources Corporation(13)      
|        |                                                                                                                                                                       
|10.45   | Loan Agreement
        dated September 12, 2006 between Canyon Copper Corp. and Aton Ventures
        Fund Ltd.(17)                                                   
|        |                                                                                                                                                                       
|10.46   | Loan Agreement
        dated September 11, 2006 between Canyon Copper Corp. and Asset Protection
        Fund Ltd. (17)                                               
|        |                                                                                                                                                                       
|10.47   | Convertible
        Promissory Note dated September 12, 2006 between Canyon Copper Corp. and
        Aton Ventures Fund Ltd. (17)                                     
|        |                                                                                                                                                                       
|10.48   | Convertible
        Promissory Note dated September 11, 2006 between Canyon Copper Corp. and
        Asset Protection Fund Ltd. (17)                                  
|        |                                                                                                                                                                       
|10.49   | Promissory Note
        dated August 16, 2006 between Canyon Copper Corp. and Susan Hand. (18)                                                                        
|        |                                                                                                                                                                       
|10.50   | Promissory Note
        dated August 16, 2006 between Canyon Copper Corp. and Walter Kondrosky.
        (18)                                                          
|        |                                                                                                                                                                       
|10.51   | Promissory Note
        dated August 16, 2006 between Canyon Copper Corp. and Anthony Harvey.(18)                                                                     
|        |                                                                                                                                                                       
|10.52   | Promissory Note
        dated August 16, 2006 between Canyon Copper Corp. and Kathy Huettl. (18)                                                                      
|        |                                                                                                                                                                       
|10.53   | Promissory Note
        dated August 16, 2006 between Canyon Copper Corp. and Bob Gibb. (18)                                                                          
|        |                                                                                                                                                                       
|14.1    | Code of Ethics.(3)                                                                                                                                                    
|        |                                                                                                                                                                       
|31.1    | Certification
        of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                               
|        |                                                                                                                                                                       
|31.2    | Certification
        of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                               
|        |                                                                                                                                                                       
|32.1    | Certification
        of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|        |                                                                                                                                                                       
|32.2    | Certification
        of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|        |                                                                                                                                                                       
|99.1    | Audit committee
        Charter.(3)                                                                                                                                   
|        |                                                                                                                                                                       
|99.2    | Disclosure Committee
        Charter.(3)                                                                                                                              

50

---

|(1)  | Filed with the SEC as an exhibit to our Registration
      Statement on Form SB-2 originally filed on April 26, 2000.
|---- | ---------------------------------------------------------------------------------------------------------------------
|(2)  | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on November 5, 2002.                  
|(3)  | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on August 26, 2003.                 
|(4)  | Field with the SEC as an exhibit to our Current Report on
      Form 8-K filed on February 10, 2004.                 
|(5)  | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on February 20, 2004.                 
|(6)  | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on April 8, 2004.                     
|(7)  | Filed with the SEC as an exhibit to our Registration
      Statement on Form S-8 filed on June 17, 2004.             
|(8)  | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on August 20, 2004.                   
|(9)  | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on October 8, 2004.                 
|(10) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed November 22, 2004.               
|(11) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on February 22, 2005.            
|(12) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on May 23, 2005.                 
|(13) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on February 7, 2006.                  
|(14) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on February 16, 2006.                 
|(15) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on April 10, 2006.                    
|(16) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on May 22, 2006.                 
|(17) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on September 15, 2006.                
|(18) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on September 7, 2006.                 

ITEM
14.              PRINCIPAL
ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees billed for the two most recently completed
fiscal years ended June 30, 2006 and June 30, 2005 for professional services
rendered by the principal accountant for the audit of our annual financial
statements and review of the financial statements included our Quarterly Reports
on Form 10-QSB and services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for these fiscal
periods were as follows:

Year Ended June 30, 2006
    Year Ended June 30, 2005Audit Fees
    $33,300
    $17,050Audit Related Fees
    -
    -Tax Fees
    $5,200
    -All Other Fees
    -
    -Total
    $38,500
    $17,050


Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

The policy of our Audit Committee is to pre-approve all audit
and permissible non-audit services to be performed by our independent auditors
during the fiscal year.

No services related to Audit-Related Fees, Tax
Fees or All Other Fees described above that was approved by the Audit
Committee pursuant to the waiver of pre-approval provisions set forth in the
applicable rules of the SEC.

51

---

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

CANYON COPPER CORP.

|By: | /s/ Anthony Harvey                   | 
|--- | ------------------------------------ | 
|    | ANTHONY HARVEY                       | 
|    | Chairman and Chief Executive Officer | 
|    | Director                             | 
|    | (Principal Executive Officer)        | 
|    | Date: October 13, 2006               | 

In accordance with the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature
      
      Title
      Date/s/ Bryan Wilson
      
      President, Treasurer and Director
      October 13, 2006BRYAN WILSONChief Financial Officer/s/ Kurt Bordian
      
      (Principal Accounting Officer)
      October 13, 2006KURT BORDIANChairman, Chief Executive Officer/s/ Anthony Harvey
      
      and Director
      October 13, 2006ANTHONY HARVEY
      
      (Principal Executive Officer)/s/ Mark A. Reynolds
      
      Vice President, Finance and
      October 13, 2006MARK A. REYNOLDS
      
      Director/s/ Benjamin
        Ainsworth
      
      Secretary and Director
      October 13, 2006BENJAMIN AINSWORTH/s/ John Carlesso
      
      Director
      October 13, 2006JOHN CARLESSO/s/ Milton Datsopoulos
      
      Director
      October 13, 2006MILTON DATSOPOULOS/s/ Cameron Reynolds
      
      Director
      October 13, 2006CAMERON REYNOLDS


---